Accounting For Frequent Fliers

Part1. The cost of United Frequent Flier program:

What are the various methods United might use to measure the costs of it frequent flier program? What are the potential differences in dollar of the cost measured by each method?

What method should united use to measure the cost of its frequent flier program? Estimate the cost of the program using this method. Show all calculations and indicate the assumption you make.

If you were the chief financial officer (CFO) of United, how would you determine if continuing the frequent flier program would be beneficial to Untied?

Part 2. Financial disclosure for Uniteds frequent flier program

Do you believe the United should account in its published financial statement for the frequent flier program or is disclosure in public filling with SEC sufficient? Why?

In either case, what is it that should be accounted for or disclosed? Why?

What possible ways might United choose to account for the program in its published financial statement if it choose to do so?

How do you believe United should account for program in its published financial statements? Explain and support your chosen method and why you reject other approaches, Show by some means (such as journal entries, T accounts, or pro form statements) how your chosen method would be applied and all of the accounts that would be affected by the accounting you believe to be the best.

If you were CFO of United, what would you do?

**Must show numbers**