BGFV » Topics » Revenue Recognition

These excerpts taken from the BGFV 10-K filed Feb 27, 2009.
Revenue Recognition
 
The Company earns revenue by selling merchandise primarily through its retail stores. Revenue is recognized when merchandise is purchased by and delivered to the customer and is shown net of estimated returns during the relevant period. The allowance for sales returns is estimated based upon historical experience.
 
Cash received from the sale of gift cards is recorded as a liability, and revenue is recognized upon the redemption of the gift card or when it is determined that the likelihood of redemption is remote (“gift card breakage”) and no liability to relevant jurisdictions exists. The Company determines the gift card breakage rate based upon historical redemption patterns and recognizes gift card breakage on a straight-line basis over the estimated gift card redemption period (20 quarters as of the end of fiscal 2008). The Company recognized approximately $0.5 million, $0.5 million and $0.4 million in gift card breakage revenue for fiscal 2008, 2007 and 2006, respectively.
 
The Company records sales tax collected from its customers on a net basis, and therefore excludes it from revenues as defined in Financial Accounting Standards Board (“FASB”) Emerging Issues Task Force (“EITF”) 06-3, How Taxes Collected from Customers and Remitted to Governmental Authorities Should Be Presented in the Income Statement (That Is, Gross versus Net Presentation).


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BIG 5 SPORTING GOODS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
 
Also included in revenue are sales of returned merchandise to vendors specializing in the resale of defective or used products, which have historically accounted for less than 1% of net sales.
 
Revenue
Recognition



 



The Company earns revenue by selling merchandise primarily
through its retail stores. Revenue is recognized when
merchandise is purchased by and delivered to the customer and is
shown net of estimated returns during the relevant period. The
allowance for sales returns is estimated based upon historical
experience.


 



Cash received from the sale of gift cards is recorded as a
liability, and revenue is recognized upon the redemption of the
gift card or when it is determined that the likelihood of
redemption is remote (“gift card breakage”) and no
liability to relevant jurisdictions exists. The Company
determines the gift card breakage rate based upon historical
redemption patterns and recognizes gift card breakage on a
straight-line basis over the estimated gift card redemption
period (20 quarters as of the end of fiscal 2008). The Company
recognized approximately $0.5 million, $0.5 million
and $0.4 million in gift card breakage revenue for fiscal
2008, 2007 and 2006, respectively.


 



The Company records sales tax collected from its customers on a
net basis, and therefore excludes it from revenues as defined in
Financial Accounting Standards Board (“FASB”) Emerging
Issues Task Force (“EITF”)
06-3, How
Taxes Collected from Customers and Remitted to Governmental
Authorities Should Be Presented in the Income Statement (That
Is, Gross versus Net Presentation).






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BIG 5
SPORTING GOODS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(continued)


 



Also included in revenue are sales of returned merchandise to
vendors specializing in the resale of defective or used
products, which have historically accounted for less than 1% of
net sales.


 




This excerpt taken from the BGFV 10-Q filed Aug 1, 2008.
Revenue Recognition
 
The Company earns revenue by selling merchandise primarily through its retail stores. Revenue is recognized when merchandise is purchased by and delivered to the customer and is shown net of estimated returns during the relevant period. The allowance for sales returns is estimated based upon historical experience.
 
Cash received from the sale of gift cards is recorded as a liability, and revenue is recognized upon the redemption of the gift card or when it is determined that the likelihood of redemption is remote (“gift card breakage”) and no liability to relevant jurisdictions exists. The Company determines the gift card breakage rate based upon historical redemption patterns and recognizes gift card breakage on a straight-line basis over the estimated gift card redemption period (20 quarters as of the end of the second quarter of fiscal 2008). The Company recognized approximately $122,000 and $245,000 in gift card breakage revenue for the 13 weeks and 26 weeks ended June 29, 2008, respectively, compared to approximately $114,000 and $222,000 for the 13 weeks and 26 weeks ended July 1, 2007, respectively.
 
 
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BIG 5 SPORTING GOODS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
 
The Company records sales tax collected from its customers on a net basis, and therefore excludes it from revenues as defined in Financial Accounting Standards Board (“FASB”) Emerging Issues Task Force (“EITF”) 06-3, How Taxes Collected from Customers and Remitted to Governmental Authorities Should Be Presented in the Income Statement (That Is, Gross versus Net Presentation).
 
Included in revenue are sales of returned merchandise to vendors specializing in the resale of defective or used products, which have historically accounted for less than 1% of net sales.
 
This excerpt taken from the BGFV 10-Q filed May 2, 2008.
Revenue Recognition
 
The Company earns revenue by selling merchandise primarily through its retail stores. Revenue is recognized when merchandise is purchased by and delivered to the customer and is shown net of estimated returns during the relevant period. The allowance for sales returns is estimated based upon historical experience. Cash received from the sale of gift cards is recorded as a liability, and revenue is recognized upon the redemption of the gift card or when it is determined that the likelihood of redemption is remote (“gift card breakage”) and no liability to relevant jurisdictions exists. The Company determines the gift card breakage rate based upon historical redemption patterns and recognizes gift card breakage over the estimated gift card redemption period (20 quarters as of the end of the first quarter of fiscal 2008). The Company records sales tax collected from its customers on a net basis, and therefore excludes it from revenues as defined in Financial Accounting Standards Board (“FASB”) Emerging Issues Task Force (“EITF”) 06-3, How Taxes Collected from Customers and Remitted to Governmental Authorities Should Be Presented in the Income Statement (That Is, Gross versus Net Presentation). Also included in revenue are sales of returned merchandise to vendors specializing in the resale of defective or used products, which have historically accounted for less than 1% of net sales.
 
These excerpts taken from the BGFV 10-K filed Mar 10, 2008.
Revenue Recognition
 
The Company earns revenue by selling merchandise primarily through its retail stores. Revenue is recognized when merchandise is purchased by and delivered to the customer and is shown net of estimated returns during the relevant period. The allowance for sales returns is estimated based upon historical experience. Cash received from the sale of gift cards is recorded as a liability, and revenue is recognized upon the redemption of the gift card or when it is determined that the likelihood of redemption is remote (“gift card breakage”) and no liability to relevant jurisdictions exists. The Company determines the gift card breakage rate based upon historical redemption patterns and recognizes gift card breakage over the estimated gift card redemption period (20 quarters as of the end of fiscal


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BIG 5 SPORTING GOODS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
 
2007). The Company records sales tax collected from its customers on a net basis, and therefore excludes it from revenues as defined in Financial Accounting Standards Board (“FASB”) Emerging Issues Task Force (“EITF”) 06-3, How Taxes Collected from Customers and Remitted to Governmental Authorities Should Be Presented in Income Statement (That Is, Gross versus Net Presentation). Also included in revenue are sales of returned merchandise to vendors specializing in the resale of defective or used products, which have historically accounted for less than 1% of net sales.
 
Revenue
Recognition



 



The Company earns revenue by selling merchandise primarily
through its retail stores. Revenue is recognized when
merchandise is purchased by and delivered to the customer and is
shown net of estimated returns during the relevant period. The
allowance for sales returns is estimated based upon historical
experience. Cash received from the sale of gift cards is
recorded as a liability, and revenue is recognized upon the
redemption of the gift card or when it is determined that the
likelihood of redemption is remote (“gift card
breakage”) and no liability to relevant jurisdictions
exists. The Company determines the gift card breakage rate based
upon historical redemption patterns and recognizes gift card
breakage over the estimated gift card redemption period (20
quarters as of the end of fiscal





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BIG 5
SPORTING GOODS CORPORATION




NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



(continued)

 



2007). The Company records sales tax collected from its
customers on a net basis, and therefore excludes it from
revenues as defined in Financial Accounting Standards Board
(“FASB”) Emerging Issues Task Force
(“EITF”) 06-3,
How Taxes Collected from Customers and Remitted to
Governmental Authorities Should Be Presented in Income Statement
(That Is, Gross versus Net Presentation).
Also included in
revenue are sales of returned merchandise to vendors
specializing in the resale of defective or used products, which
have historically accounted for less than 1% of net sales.


 




This excerpt taken from the BGFV 10-K filed Mar 16, 2006.
Revenue Recognition
 
The Company earns revenue by selling merchandise primarily through its retail stores. Also included in revenue are sales of returned merchandise to vendors specializing in the resale of defective or used products, which historically has accounted for less than 1% of net sales. Revenue is recognized when merchandise is purchased by and delivered to the customer and is shown net of estimated returns during the relevant period. The allowance for sales returns is estimated based upon historical experience. Cash received from the sale of gift cards is recorded as a liability, and revenue is recognized upon the redemption of the gift card or when it is determined that the likelihood of redemption is remote (“Gift Card Breakage”) and no liability to relevant jurisdictions exists. The Company determines the Gift Card Breakage rate based upon historical redemption patterns. Gift Card Breakage income is included in revenue in the consolidated statements of operations. During the fourth quarter of fiscal 2005, the Company recognized $1.2 million in revenue related to its initial recognition of Gift Card Breakage. Installment payments on layaway sales are recorded as a liability, and revenue is recognized upon receipt of final payment from and delivery of product to the customer.
 
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