An incentive is given to a customer for referring another customer who made a purchase. The Income Statement will show this as a marketing expense and the balance sheet will carry this as a deferred revenue.

Do we carry the deferred revenue on the balance sheet indefinitely? Or do we set up some allowance account to account for customers that don't use the incentive (like a $10 off coupon)?

Where can I find the rule for this in FASB? I have looked through 605-50-45 and 450-25-1 and neither seem to cover this. I looked at EITF ABSTRACTS Issue No. 01-9 and it does indicate that no breakage should be allowed for when recording the expense (no past results on take rate for this program so we can't make a reasonable estimate).

Any help would be great.

In what way is this deferred revenue? If you provide a voucher or a credit in an instore account you have created a liability