TGE » Topics » Revenue Recognition

These excerpts taken from the TGE 10-K filed Mar 16, 2009.

Revenue Recognition

 

Seismic Surveys

 

The Company provides seismic data acquisition survey services to its customers under general service agreements which define certain obligations for the Company and for its customers.  A supplemental agreement setting forth the terms of a specific project, which may be cancelled by either party upon 30 days advance written notice, is entered into for every project.  These supplemental agreements are either “turnkey” agreements providing for a fixed fee to be paid for each unit of seismic data acquired or “term” agreements providing for a fixed hourly, daily, or monthly fee during the term of the project.  The duration of these projects will vary from a few days to several months.  The Company recognizes revenue when services are performed under both types of agreements.  Services are defined as the commencement of data acquisition.  Under turnkey agreements, the total number of units of seismic data to be gathered is set forth in the agreement, and revenue is recognized as services are performed on a per unit of seismic data acquired rate.  Under term agreements, revenue is recognized as services are performed based on the time worked rate provided in the term agreement.  Under both turnkey and term agreements, cost of earned revenue is recognized by multiplying total estimated agreement cost by the percentage-of-completion of the agreement.  The excess of that amount over the cost of earned revenue reported in prior periods is recognized as cost of earned revenue for the period.  Agreements are not segmented nor combined for purposes of calculating percentage of completion.  The asset “Costs and estimated earnings in excess of billings on uncompleted contracts” represents cost incurred on turnkey agreements in excess of billings on those agreements.  The liability “Billings in excess of costs and estimated earnings on uncompleted contracts” represents billings on turnkey agreements in excess of cost on those agreements.  Claims have been negligible in the years ended December 31, 2008, 2007, and 2006.

 

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Table of Contents

 

Gravity Data

 

The Company owns a data bank which contains gravity data, and to a lesser extent magnetic data, from many of the major oil and natural gas producing areas located within the U.S.  When an order for gravity data is received, the portion of gravity data requested by the customer is prepared in digital format for licensing and shipment to the customer.  This process is performed by an employee in the Company’s headquarters office and normally takes no longer than a few days.  The licensing of gravity data is not a material part of the Company’s revenue.  Gravity data revenue during the years ended December 31, 2008, 2007, and 2006 was approximately $46,100, $187,300, and $500, respectively.

 

Revenue
Recognition



 



Seismic Surveys



 



The Company provides seismic data acquisition survey
services to its customers under general service agreements which define certain
obligations for the Company and for its customers.  A supplemental agreement setting forth the
terms of a specific project, which may be cancelled by either party upon 30
days advance written notice, is entered into for every project.  These supplemental agreements are either “turnkey”
agreements providing for a fixed fee to be paid for each unit of seismic data
acquired or “term” agreements providing for a fixed hourly, daily, or monthly
fee during the term of the project.  The
duration of these projects will vary from a few days to several months.  The Company recognizes revenue when services
are performed under both types of agreements. 
Services are defined as the commencement of data acquisition.  Under turnkey agreements, the total number of
units of seismic data to be gathered is set forth in the agreement, and revenue
is recognized as services are performed on a per unit of seismic data acquired
rate.  Under term agreements, revenue is
recognized as services are performed based on the time worked rate provided in
the term agreement.  Under both turnkey
and term agreements, cost of earned revenue is recognized by multiplying total
estimated agreement cost by the percentage-of-completion of the agreement.  The excess of that amount over the cost of
earned revenue reported in prior periods is recognized as cost of earned
revenue for the period.  Agreements are
not segmented nor combined for purposes of calculating percentage of
completion.  The asset “Costs and
estimated earnings in excess of billings on uncompleted contracts” represents
cost incurred on turnkey agreements in excess of billings on those
agreements.  The liability “Billings in
excess of costs and estimated earnings on uncompleted contracts” represents
billings on turnkey agreements in excess of cost on those agreements.  Claims have been negligible in the years
ended December 31, 2008, 2007, and 2006.



 



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Table
of Contents



 



Gravity
Data



 



The Company owns a data bank which contains gravity
data, and to a lesser extent magnetic data, from many of the major oil and
natural gas producing areas located within the U.S.  When an order for gravity data is received,
the portion of gravity data requested by the customer is prepared in digital
format for licensing and shipment to the customer.  This process is performed by an employee in
the Company’s headquarters office and normally takes no longer than a few
days.  The licensing of gravity data is
not a material part of the Company’s revenue. 
Gravity data revenue during the years ended December 31, 2008,
2007, and 2006 was approximately $46,100, $187,300, and $500, respectively.



 



These excerpts taken from the TGE 10-K filed Mar 14, 2008.

Revenue Recognition

 

Seismic Surveys

 

The Company provides seismic data acquisition survey services to its customers under general service agreements which define certain obligations for the Company and for its customers. A supplemental agreement setting forth the terms of a specific project, which may be cancelled by either party upon 60 days advance written notice, is entered into for every project. These supplemental agreements are either “turnkey” agreements providing for a fixed fee to be paid for each unit of seismic data acquired or “term” agreements providing for a fixed hourly, daily, or monthly fee during the term of the project. The duration of these projects will vary from a few days to several months. The Company recognizes revenue when services are performed under both types of agreements. Services are defined as the commencement of data acquisition. Under turnkey agreements, the total number of units of seismic data to be gathered is set forth in the agreement, and revenue is recognized as services are performed on a per unit of seismic data acquired rate. Under term agreements, revenue is recognized as services are performed based on the time worked rate provided in the term agreement. Under both turnkey and term agreements, cost of earned revenue is recognized by multiplying total estimated agreement cost by the percentage-of-completion of the agreement. The excess of that amount over the cost of earned revenue reported in prior periods is recognized as cost of earned revenue for the period. Agreements are not segmented nor combined for purposes of calculating percentage of completion. The asset “Costs and estimated earnings in excess of billings on uncompleted contracts” represents cost incurred on turnkey agreements in excess of billings on those agreements. The liability “Billings in excess of costs and estimated earnings on uncompleted contracts” represents billings on turnkey agreements in excess of cost on those agreements. Claims have been negligible in the years ended December 31, 2007, 2006, and 2005.

 

Gravity Data

 

The Company owns a data bank which contains gravity data, and to a lesser extent magnetic data, from many of the major oil and natural gas producing areas located within the U.S. When an order for gravity data is received, the portion of gravity data requested by the customer is prepared in digital format for licensing and shipment to the customer. This process is performed by an employee in the Company’s headquarters office and normally takes a few days at the most. The licensing of gravity data is not a material part of the Company’s revenue. Gravity data revenue during the years ended December 31, 2007, 2006, and 2005 was approximately $187,300, $500, and $230,400, respectively.

 

20



 

Revenue Recognition



 



Seismic
Surveys



 



The Company provides seismic data acquisition survey
services to its customers under general service agreements which define certain
obligations for the Company and for its customers. A supplemental agreement
setting forth the terms of a specific project, which may be cancelled by either
party upon 60 days advance written notice, is entered into for every project. These
supplemental agreements are either “turnkey” agreements providing for a fixed
fee to be paid for each unit of seismic data acquired or “term” agreements
providing for a fixed hourly, daily, or monthly fee during the term of the
project. The duration of these projects will vary from a few days to several
months. The Company recognizes revenue when services are performed under both
types of agreements. Services are defined as the commencement of data
acquisition. Under turnkey agreements, the total number of units of seismic
data to be gathered is set forth in the agreement, and revenue is recognized as
services are performed on a per unit of seismic data acquired rate. Under term
agreements, revenue is recognized as services are performed based on the time
worked rate provided in the term agreement. Under both turnkey and term
agreements, cost of earned revenue is recognized by multiplying total estimated
agreement cost by the percentage-of-completion of the agreement. The excess of
that amount over the cost of earned revenue reported in prior periods is
recognized as cost of earned revenue for the period. Agreements are not
segmented nor combined for purposes of calculating percentage of completion. The
asset “Costs and estimated earnings in excess of billings on uncompleted
contracts” represents cost incurred on turnkey agreements in excess of billings
on those agreements. The liability “Billings in excess of costs and estimated
earnings on uncompleted contracts” represents billings on turnkey agreements in
excess of cost on those agreements. Claims have been negligible in the years
ended December 31, 2007, 2006, and 2005.



 



Gravity
Data



 



The Company owns a data bank which contains gravity
data, and to a lesser extent magnetic data, from many of the major oil and
natural gas producing areas located within the U.S. When an order for gravity
data is received, the portion of gravity data requested by the customer is
prepared in digital format for licensing and shipment to the customer. This
process is performed by an employee in the Company’s headquarters office and normally
takes a few days at the most. The licensing of gravity data is not a material
part of the Company’s revenue. Gravity data revenue during the years ended December 31,
2007, 2006, and 2005 was approximately $187,300, $500, and $230,400,
respectively.



 



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