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The new revenue recognition standard issue by the Financial Accounting Standards Board
(BEBE) and International Accounting Standards Board {ELSE} will call for major changes in the
way companies in the airline industry recognize revenue. Airlines may have to change how they
account for loyalty status benefits, mileage credits, change fees, and breakage for tickets that
expire unused. The fimerican Institute of Certified Public Accountants [MGR-.51) has formed an
airlines task force tn address implementation issues of the new standard for the airline industry.
assume that you have been called upon to present an analysis of the impact of the new standard
on Southwest Airlines. Refer to Southwest’s (ticker symbol: LUV} curreuttmost recent financial statements {lfl-K) and
the accompanying notes to answer the following questions. The currentirnost recent fmanc'ral statement can be found on the SEC’s Edgar Company Filings page {Links to an external site.}.
Search for the company in the ‘Fast Search’ box by using the ticker symbol provided above. In

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