We run a website for which we sell access/subscription (like Spotify etc). We occasionally sell bulk subscriptions to third parties who provide them as gifts to their customers - the end user is not the business itself. An example would be a company pre-buying 1000 'codes' providing 1 person a 12 month subscription to our and distributing them to their customers as part of a promotion. If selling a 12 month subscription directly to a consumer, I understand we recognize revenue on delivery of the service from use of the code over 12 months. I'm aware of breakage and how to manage un-used codes. I'm trying to figure out if these assumptions are correct in the case of third party sales:
1. If the codes can be used any time before a given expiration rate and when they are used they provide access for, say, 12 months, no matter when they are redeemed, then we would account for them from use just as we would when selling directly to a consumer as the liability to provide the service dates from redemption in the normal way? (I understand about breakage and so on)
2. If we sell codes that grant access between specific dates - between January 1st and December 31st, for example - then we could recognize revenue over this period, regardless of whether or not the vouchers are redeemed.
I'm certain that just because the codes are sold to a third party we can't transfer the liability at that point to the third party, even the consideration is non-transferable. Though would be good to know if it was!
Thanks for any help!