News and analysis for the well-informed compliance or audit exec.
Annual Membership best value
Subscribe now for $365
Our lowest price ($1 per day) for one year.
- Chief Compliance Officer and VP of Legal Affairs, Arrow Electronics
By Tammy Whitehouse2018-02-21T08:15:00
New rules on revenue recognition taking effect for public companies in the first quarter of 2018 have changed the way companies must recognize revenue associated with gift cards and other prepaid cards, especially for amounts that are never redeemed.
The recognition of the sale of a gift card is straightforward. When a company sells a gift card, the cash it receives is recognized as a liability until the gift card is redeemed for goods or services. Upon redemption, then the company reverses the liability and recognizes the revenue.
But what about gift cards that are never redeemed? Or small amounts that remain stranded on gift cards? In gift card parlance, the term for those amounts is “breakage.” We all have some breakage in our wallets that is likely causing some accounting headaches—a gift card that’s more than a year old to a specialty retailer not commonly visited, or one to a restaurant that just doesn’t come to mind when planning a meal out, or one that hasn’t been spent entirely.
THIS IS MEMBERS-ONLY CONTENT. To continue reading, choose one of the options below.
News and analysis for the well-informed compliance or audit exec.
Annual Membership best value
Subscribe now for $365
Our lowest price ($1 per day) for one year.
2019-09-04T17:23:00Z By Tammy Whitehouse
Deadlines are fast approaching for state unclaimed property filings, with roughly 40 states setting filing dates on Oct. 31 or Nov. 1.
2018-04-10T21:15:00Z By Tammy Whitehouse
Despite the enormity of accounting change occurring at public companies, some might spare themselves some grief by adopting certain rules before they are mandatory.
2024-07-02T20:35:00Z By Adrianne Appel
Three former executives of Chicago-based Outcome Health, a healthcare technology company, were sentenced for misleading an auditor, clients, lenders, and investors about a scheme to sell $45 million in overbilled advertisements.
2024-06-12T01:46:00Z By Kyle Brasseur
Erica Williams was reappointed to a second term as chair of the Public Company Accounting Oversight Board after an ambitious first three years in the role that have seen the agency work to update many of its standards deemed outdated.
2024-06-03T17:35:00Z By Kyle Brasseur
Software company Autodesk said it won’t restate several years of financial statements following an audit committee investigation into potential accounting misconduct.
2024-05-24T16:27:00Z By Jeff Dale
Los Angeles-based bank holding company Broadway Financial Corp. disclosed in a public filing weaknesses discovered in its internal control over financial reporting because of training shortfalls.
Site powered by Webvision Cloud