Qantas Airways Limited is the major airline company in Australia. The company's statement of financial position (balance sheet) as at June 30, 2009, is presented below in Exhibit 4-11. In Note 1(G) to the financial statements, Qantas describes its passenger, freight, and tours and travel revenue policy:
Passenger and freight revenue is included in the Income Statement at the fair value of the consideration received net of sales discount, passenger and freight interline/IATA commission and GST. Tours and travel revenue is included in the Income Statement as the net amount of commission retained by Qantas. Passenger recoveries (including fuel surcharge on passenger tickets) are disclosed as part of net passenger revenue. Freight fuel surcharge is disclosed as part of net freight revenue. Other sales commissions paid by Qantas are included in expenditure.
Passenger, freight and tours and travel sales are credited to revenue received in advance and subsequently transferred to revenue when passengers or freight are uplifted or when tours and travel air tickets and land content are utilized. Unused tickets are recognized as revenue using estimates regarding the timing of recognition based on the terms and conditions of the ticket. Changes in these estimation methods could have a material impact on the financial statements of Qantas.
In Exhibit 4-11.
Balance Sheets
as at 30 June 2009

Required:
a. Referring to the balance sheet, what was the value of the transportation that Qantas was committed to provide at year end in 2009 and 2008?
b. Referring to the revenue recognition criteria, explain why Qantas's revenue recognition policy is appropriate.
c. Qantas passengers can earn frequent flyer miles each time they fly with Qantas. When passengers have earned enough frequent flyer miles, they can travel free on Qantas. How should Qantas account for these free trips?

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Qantas Group 2008 2008 200 CURRENT ASSETS Notes SM SM 10 3,617 2,5993404 2,46 11 1,054 1.435 2,296 2,705 561 078 Cash and cash equ valents Receivables Other financial assets Irventories Cuiment tax receivable Assets classified as held for sale 561 06 199 13 26 el6515 249 295 22 6,863 Total current assets NON CURRENT ASSETS Receivables Other financial as98ts 522 5322.258 Investments accounted for using the equity method Other investments 768 15 1 12,155 2,341 10,763 0834 Propery, plant and equipment Intangiblo assets Other 317 14,083 14,084 14,454 12825 3 20,049 9 700 21,369 19,489 Total non-current assets Total assets CURRENT LIABILITIES 9 1,833 174 2156 2.599 20 3,109 3,257 ,688 2.995 Payablas Revenue received in advance Interest-bearing liabilities Other financial kabilities Provisio Current tax liabilities Delerred lease benefits income 608 641 507 728 641 960 417 16 195 614 704 668 7661 Total current liabilities 6,714 6,658 NON-CURRENT LIABILITIES 20 1.232 083 1.232 ,083 Revenue received in advanco Interest-bearing liabilities Other linancial liabilities Provisions Deferred tax liabilities Deferred lease benefts incoe 21 895 3573 6526 3,964 475 18 50 .361 Total non-cument liabilities Total iabilities 7,570 3224 3 14,284 13,965 15,882 14,372 Net sssets 5,765 5487 5,117 EQUITY lssued capital Treasury sharss 23 4,729 3,9764,729 3,976 61 ,043 5,721 5,735,467 5,117 ,38 Relsined earnings Equity attributable to members of Cantas Minority interest Total oquity 5,765 5,735 5,487