They're still losing revenue in that, when these ad credits are spent, they're not receiving any actual money from advertisements that would have shown up in place of these free ads.
I’m not an accountant, but I do know that gift cards should be recognized as revenue at the time of services rendered, not at the time of a sale of a gift card. Are grants similar in that a “gift card” is being granted and the revenue can be realized at a later date?
I'm not an accountant, but I believe that's revenue recognition.
I sell you a $10 gift card today. I can't recognize the revenue until you spend the $10.
However, if I know you're going to spend $10 less at my business this year, I can GIVE you a $10 gift card. Then, hopefully, you'll come to my business as usual. When you spend the $10, I can record that as revenue, and then I can record a $10 expense for the cost of sale.
Top line doesn't change. I think. But I'm not an accountant. I don't know.
