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amlin423
Returning Member

Tracking inventory that is "given away"

My business lets users earn virtual currencies when they complete tasks in our mobile app, and the virtual currency can be used to redeem gift cards. Since we make money from advertisers who advertise in our app, the inventory of gift cards aren't directly tied to revenue and so I think of the giftcards as a "giveaway". Would this be a correct assumption? What is the proper way to account for this. 

2 Replies
IsabellaG
Employee Tax Expert

Tracking inventory that is "given away"

Who are the users and what is the business purpose of these giveaways? It sounds like this could be considered advertising or promotions

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amlin423
Returning Member

Tracking inventory that is "given away"

Users would be anyone who installs our mobile app from the Google Play store. The primary purpose of the app is to allow users to earn rewards by completing offers in our app (example of an offer would be: install this app and reach level 5).

 

Our advertisers (mobile app game publishers) pays us to display their apps within our app and allows us to incentivize users to try their games, so we issue virtual currency rewards as an incentive and let users redeem these points for gift cards. 

 

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