Luxottica Group, S.p.A. (LUX)

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LUX » Topics » A reconciliation of the changes in deferred revenue from the sale of warranty contracts and other deferred items for the years ended December 31, 2005 and 2006 is as follows:

This excerpt taken from the LUX 20-F filed Jun 29, 2007.

A reconciliation of the changes in deferred revenue from the sale of warranty contracts and other deferred items for the years ended December 31, 2005 and 2006 is as follows:

In thousands of Euro	2005		2006
Beginning balance	37,362		41,099
Translation difference	5,247		(3,643	)
Warranty contracts sold	42,677		30,151
Other deferred revenues	540		70
Amortization of deferred revenues	(44,727	)	(51,879	)
Total	41,099		15,798
Current	35,353		15,798
Non-current	5,746		—

The Company earns and accrues franchise revenues based on sales by franchisees which are accrued as earned. Initial franchise fees are recorded as revenue when all material services or conditions relating to the sale of the franchise have been substantially performed or satisfied by the Company and when the related store begins operations. Accruals are established for amounts due under these relationships when they are determined to be uncollectible.

The Wholesale and Retail Divisions may offer certain promotions during the year. Free frames given to customers as part of a promotional offer are recorded in cost of sales at the time they are delivered to the customer. Discounts and coupons tendered by customers are recorded as a reduction of revenue at the date of sale.

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Luxottica Group, S.p.A. (LUX)

LUX » Topics » A reconciliation of the changes in deferred revenue from the sale of warranty contracts and other deferred items for the years ended December 31, 2005 and 2006 is as follows:

A reconciliation of the changes in deferred revenue from the sale of warranty contracts and other deferred items for the years ended December 31, 2005 and 2006 is as follows: