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These excerpts taken from the AN 10-K filed Feb 17, 2010. Revenue Recognition Revenue consists of the sales of new and used vehicles, commissions from related finance and insurance products, sales of parts and services, and sales of other products. We recognize revenue in the period in which products are sold or services are provided. We recognize vehicle and finance and insurance revenue when a sales contract has been executed, the vehicle has been delivered, and payment has been received or financing has been arranged. Rebates, holdbacks, floorplan assistance, and certain other dealer credits received from manufacturers are recorded as a reduction of the cost of the vehicle and recognized into income upon the sale of the vehicle or when earned under a specific manufacturer program, whichever is later. See Note 1 of the Notes to Consolidated Financial Statements for further information regarding revenue recognition.
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Table of ContentsRevenue Recognition Revenue consists of the sales of new and used vehicles, commissions from related finance and insurance products, sales of parts and services, and sales of other products. We recognize revenue (which excludes sales taxes) in the period in which products are sold or services are provided. We also provide automotive services, such as customer-paid repairs and maintenance, as well as repairs and maintenance under manufacturer warranties and extended service contracts. We recognize revenue for these services as they are provided. We recognize vehicle and finance and insurance revenue when a sales contract has been executed, the vehicle has been delivered, and payment has been received or financing has been arranged. Rebates, holdbacks, floorplan assistance, and certain other dealer credits received directly from manufacturers are recorded as a reduction of the cost of the vehicle and recognized into income upon the sale of the vehicle or when earned under a specific manufacturer program, whichever is later. Revenue on finance and insurance products represents commissions earned by us for: (i) loans and leases placed with financial institutions in connection with customer vehicle purchases financed and (ii) vehicle protection products sold. We sell and receive a commission, which is recognized upon sale, on the following types of products: extended service contracts, maintenance programs, guaranteed auto protection (known as “GAP,” this protection covers the shortfall between a customer’s loan balance and insurance payoff in the event of a casualty), “tire and wheel” protection, and theft protection products. The products we offer include products that are sold and administered by independent third parties, including the vehicle manufacturers’ captive finance subsidiaries. Pursuant to our arrangements with these third-party providers, we primarily sell the products on a straight commission basis; however, we may sell the product, recognize commission, and participate in future profit pursuant to retrospective commission arrangements, which are recognized as earned. Certain commissions earned from the sales of finance, insurance, and other protection products are subject to chargebacks should the contracts be terminated prior to their expirations. An estimated liability for chargebacks against revenue recognized from sales of finance and insurance products is recorded in the period in which the related revenue is recognized. Our estimated liability for chargebacks is based primarily on our historical chargeback experience, and is influenced by increases or decreases in early termination rates resulting from cancellation of vehicle protection products, defaults, refinancings and payoffs before maturity, and other factors. Chargeback liabilities were $48.7 million at December 31, 2009, and $61.0 million at December 31, 2008. See Note 19 of the Notes to Consolidated Financial Statements for a discussion regarding chargeback liabilities. These excerpts taken from the AN 10-K filed Feb 17, 2009. Revenue
Recognition
Revenue consists of the sales of new and used vehicles,
commissions from related finance and insurance products, sales
of parts and services, and sales of other products. We recognize
revenue in the period in which products are sold or services are
provided. We recognize vehicle and finance and insurance revenue
when a sales contract has been executed, the vehicle has been
delivered, and payment has been received or financing has been
arranged. Rebates, holdbacks, floorplan assistance, and certain
other dealer credits received from manufacturers are recorded as
a reduction of the cost of the vehicle and recognized into
income upon the sale of the vehicle or when earned under a
specific manufacturer program, whichever is later.
Revenue Recognition Revenue consists of the sales of new and used vehicles, commissions from related finance and insurance products, sales of parts and services, and sales of other products. We recognize revenue in the period in which products are sold or services are provided. We recognize vehicle and finance and insurance revenue when a sales contract has been executed, the vehicle has been delivered, and payment has been received or financing has been arranged. Rebates, holdbacks, floorplan assistance, and certain other dealer credits received from manufacturers are recorded as a reduction of the cost of the vehicle and recognized into income upon the sale of the vehicle or when earned under a specific manufacturer program, whichever is later. Revenue
Recognition
Revenue consists of the sales of new and used vehicles,
commissions from related finance and insurance products, sales
of parts and services, and sales of other products. We recognize
revenue (which excludes sales taxes) in the period in which
products are sold or services are provided. We also provide
automotive services, such as customer-paid repairs and
maintenance, as well as repairs and maintenance under
manufacturer warranties and extended service contracts. We
recognize revenue for these services as they are provided. We
recognize vehicle and finance and insurance revenue when a sales
contract has been executed, the vehicle has been delivered, and
payment has been received or financing has been arranged.
Rebates, holdbacks, floorplan assistance, and certain other
dealer credits received directly from manufacturers are recorded
as a reduction of the cost of the vehicle and recognized into
income upon the sale of the vehicle or when earned under a
specific manufacturer program, whichever is later. Revenue on
finance and insurance products represents commissions earned by
us for: (i) loans and leases placed with financial
institutions in connection with customer vehicle purchases
financed and (ii) vehicle protection products sold.
We sell and receive a commission, which is recognized upon sale,
on the following types of products: extended service contracts,
maintenance programs, guaranteed auto protection (known as
“GAP,” this
AUTONATION,
INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
protection covers the shortfall between a customer’s loan
balance and insurance payoff in the event of a casualty),
“tire and wheel” protection, and theft protection
products. The products we offer include products that are sold
and administered by independent third parties, including the
vehicle manufacturers’ captive finance subsidiaries.
Pursuant to our arrangements with these third-party providers,
we primarily sell the products on a straight commission basis;
however, we may sell the product, recognize commission, and
participate in future profit pursuant to retrospective
commission arrangements, which are recognized as earned. Certain
commissions earned from the sales of finance, insurance, and
other protection products are subject to chargebacks should the
contracts be terminated prior to their expirations. An estimated
liability for chargebacks against revenue recognized from sales
of finance and insurance products is recorded in the period in
which the related revenue is recognized. Our estimated liability
for chargebacks is based primarily on our historical chargeback
experience, and is influenced by increases or decreases in early
termination rates resulting from cancellation of vehicle
protection products, defaults, refinancings and payoffs before
maturity, and other factors. Chargeback liabilities were
$61.0 million at December 31, 2008, and
$62.5 million at December 31, 2007. See Note 20
of the Notes to Consolidated Financial Statements for a
discussion regarding chargeback liabilities.
Revenue Recognition Revenue consists of the sales of new and used vehicles, commissions from related finance and insurance products, sales of parts and services, and sales of other products. We recognize revenue (which excludes sales taxes) in the period in which products are sold or services are provided. We also provide automotive services, such as customer-paid repairs and maintenance, as well as repairs and maintenance under manufacturer warranties and extended service contracts. We recognize revenue for these services as they are provided. We recognize vehicle and finance and insurance revenue when a sales contract has been executed, the vehicle has been delivered, and payment has been received or financing has been arranged. Rebates, holdbacks, floorplan assistance, and certain other dealer credits received directly from manufacturers are recorded as a reduction of the cost of the vehicle and recognized into income upon the sale of the vehicle or when earned under a specific manufacturer program, whichever is later. Revenue on finance and insurance products represents commissions earned by us for: (i) loans and leases placed with financial institutions in connection with customer vehicle purchases financed and (ii) vehicle protection products sold. We sell and receive a commission, which is recognized upon sale, on the following types of products: extended service contracts, maintenance programs, guaranteed auto protection (known as “GAP,” this
AUTONATION, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) protection covers the shortfall between a customer’s loan balance and insurance payoff in the event of a casualty), “tire and wheel” protection, and theft protection products. The products we offer include products that are sold and administered by independent third parties, including the vehicle manufacturers’ captive finance subsidiaries. Pursuant to our arrangements with these third-party providers, we primarily sell the products on a straight commission basis; however, we may sell the product, recognize commission, and participate in future profit pursuant to retrospective commission arrangements, which are recognized as earned. Certain commissions earned from the sales of finance, insurance, and other protection products are subject to chargebacks should the contracts be terminated prior to their expirations. An estimated liability for chargebacks against revenue recognized from sales of finance and insurance products is recorded in the period in which the related revenue is recognized. Our estimated liability for chargebacks is based primarily on our historical chargeback experience, and is influenced by increases or decreases in early termination rates resulting from cancellation of vehicle protection products, defaults, refinancings and payoffs before maturity, and other factors. Chargeback liabilities were $61.0 million at December 31, 2008, and $62.5 million at December 31, 2007. See Note 20 of the Notes to Consolidated Financial Statements for a discussion regarding chargeback liabilities. These excerpts taken from the AN 10-K filed Feb 28, 2008. Revenue
Recognition
Revenue consists of the sales of new and used vehicles,
commissions from related finance and insurance
(“F&I”) products, sales of parts and services,
and sales of other products. We recognize revenue in the period
in which products are sold or services are provided. We
recognize vehicle and finance and insurance revenue when a sales
contract has been executed, the vehicle has been delivered, and
payment has been received or financing has been arranged.
Rebates, holdbacks, floorplan assistance, and certain other
dealer credits received directly from manufacturers are recorded
as a reduction of the cost of the vehicle and recognized into
income upon the sale of the vehicle or when earned under a
specific manufacturer program, whichever is later. Revenue on
finance and insurance products represents commissions earned by
us for: (i) loans and leases
Table of Contents
AUTONATION,
INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS —
(Continued)
placed with financial institutions in connection with customer
vehicle purchases financed and (ii) vehicle protection
products sold.
We sell and receive a commission, which is recognized upon sale,
on the following types of products: extended service contracts,
maintenance programs, guaranteed auto protection (known as
“GAP,” this protection covers the shortfall between a
customer’s loan balance and insurance payoff in the event
of a casualty), “tire and wheel” protection, and theft
protection products. The products we offer include products that
are sold and administered by independent third parties,
including the vehicle manufacturers’ captive finance
subsidiaries. Pursuant to our arrangements with these
third-party providers, we primarily sell the products on a
straight commission basis; however, we may sell the product,
recognize commission, and participate in future profit pursuant
to retrospective commission arrangements, which are recognized
as earned. Certain commissions earned from the sales of finance,
insurance, and other protection products are subject to
chargebacks should the contracts be terminated prior to their
expirations. An estimated liability for chargebacks against
revenue recognized from sales of F&I products is recorded
in the period in which the related revenue is recognized. Our
estimated liability for chargebacks is based primarily on our
historical chargeback experience, and is influenced by increases
or decreases in early termination rates resulting from
cancellation of vehicle protection products, defaults,
refinancings and payoffs before maturity, and other factors.
Chargeback liabilities were $62.5 million at
December 31, 2007, and $70.1 million at
December 31, 2006.
Revenue Recognition Revenue consists of the sales of new and used vehicles, commissions from related finance and insurance (“F&I”) products, sales of parts and services, and sales of other products. We recognize revenue in the period in which products are sold or services are provided. We recognize vehicle and finance and insurance revenue when a sales contract has been executed, the vehicle has been delivered, and payment has been received or financing has been arranged. Rebates, holdbacks, floorplan assistance, and certain other dealer credits received directly from manufacturers are recorded as a reduction of the cost of the vehicle and recognized into income upon the sale of the vehicle or when earned under a specific manufacturer program, whichever is later. Revenue on finance and insurance products represents commissions earned by us for: (i) loans and leases
Table of ContentsAUTONATION, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) placed with financial institutions in connection with customer vehicle purchases financed and (ii) vehicle protection products sold. We sell and receive a commission, which is recognized upon sale, on the following types of products: extended service contracts, maintenance programs, guaranteed auto protection (known as “GAP,” this protection covers the shortfall between a customer’s loan balance and insurance payoff in the event of a casualty), “tire and wheel” protection, and theft protection products. The products we offer include products that are sold and administered by independent third parties, including the vehicle manufacturers’ captive finance subsidiaries. Pursuant to our arrangements with these third-party providers, we primarily sell the products on a straight commission basis; however, we may sell the product, recognize commission, and participate in future profit pursuant to retrospective commission arrangements, which are recognized as earned. Certain commissions earned from the sales of finance, insurance, and other protection products are subject to chargebacks should the contracts be terminated prior to their expirations. An estimated liability for chargebacks against revenue recognized from sales of F&I products is recorded in the period in which the related revenue is recognized. Our estimated liability for chargebacks is based primarily on our historical chargeback experience, and is influenced by increases or decreases in early termination rates resulting from cancellation of vehicle protection products, defaults, refinancings and payoffs before maturity, and other factors. Chargeback liabilities were $62.5 million at December 31, 2007, and $70.1 million at December 31, 2006. This excerpt taken from the AN 10-K filed Feb 28, 2007. Revenue
Recognition
Revenue consists of sales of new and used vehicles and related
finance and insurance (“F&I”) products, sales of
parts and services and sales of other products. The Company
recognizes revenue in the period in which products are sold or
services are provided. The Company recognizes vehicle and
finance and insurance revenue when a sales contract has been
executed, the vehicle has been delivered and payment has been
received or financing has been arranged. Revenue on finance and
insurance products represents commissions earned by the Company
for: (i) loans and leases placed with financial
institutions in connection with customer vehicle purchases
financed and (ii) vehicle protection products sold.
Rebates, holdbacks, floorplan assistance and certain other
dealer credits received directly from manufacturers are recorded
as a reduction of the cost of the vehicle and recognized into
income upon the sale of the vehicle or when earned under a
specific manufacturer program, whichever is later.
The Company sells and receives a commission, which is recognized
upon sale, on the following types of products: extended
warranties, guaranteed auto protection (“GAP,”
which covers the shortfall between loan balance and insurance
payoff), credit insurance, lease “wear and tear”
insurance and theft protection products. The products the
Company offers include products that are sold and administered
by independent third parties, including the vehicle
manufacturers’ captive finance subsidiaries. Pursuant to
the Company’s arrangements with these third-party
providers, it primarily sells the products on a straight
commission basis; however, it may sell the product, recognize
commission and participate in future profit pursuant to
retrospective commission arrangements, which are recognized as
earned over the life of the policies. Certain commissions earned
from the sales of finance, insurance and other protection
products are subject to chargebacks should the contracts be
terminated prior to their expirations. An estimated liability
for chargebacks against revenue recognized from sales of F&I
products is recorded in the period in which the related revenue
is recognized. Chargeback liabilities were $70.1 million
and $67.7 million at December 31, 2006 and 2005,
respectively.
This excerpt taken from the AN 10-K filed Feb 24, 2005. Revenue Recognition
Revenue consists of sales of new and used vehicles and related finance and insurance (“F&I”) products, sales of parts and service and sales of other products. As further described below, the Company recognizes revenue in the period in which products are sold or services are provided. The Company recognizes vehicle and finance and insurance revenue when a sales contract has been executed, the vehicle has been delivered and payment has been received or financing has been arranged. Revenue on finance and insurance products represents commissions earned by the Company for: (i) loans and leases placed with financial institutions in connection with customer vehicle purchases financed and (ii) vehicle protection products sold. Rebates, holdbacks, floorplan assistance and certain other dealer credits received directly from manufacturers are recorded as a reduction of the cost of the vehicle and recognized into income upon the sale of the vehicle or when earned under a specific manufacturer program, whichever is later. The Company sells and receives a commission, which is recognized upon sale, on the following types of insurance products: extended warranties, guaranteed auto protection (“GAP,” which covers the shortfall between loan balance and insurance payoff), credit insurance, lease “wear and tear” insurance and theft protection products. The Company may also participate in future underwriting profit, pursuant to retrospective commission arrangements, that would be recognized over the life of the policies. Certain commissions earned from the sales of insurance products are subject to chargebacks should the contracts be terminated prior to their expirations. An estimated liability for chargebacks against revenue recognized from sales of F&I products is recorded in the period in which the related revenue is recognized. Chargeback liabilities were $65.9 million and $64.4 million at December 31, 2004 and 2003, respectively. Through 2002, the Company reinsured through its captive insurance subsidiaries a portion of the underwriting risk related to extended warranty and credit insurance products sold and administered by certain independent third parties. Revenue and related direct costs from these reinsurance transactions were deferred and recognized over the life of the policies. Since January 1, 2003, the Company has not reinsured any new extended warranty or credit insurance products. For installment loans and leases that in the past had been underwritten by the Company and not securitized, revenue from retail financing and certain loan underwriting costs were recognized over the term of the contract using the interest method. As of December 2001, the Company had exited the auto loan and lease underwriting business, and in July 2003, sold all of its finance receivables portfolio.
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