|
|
 | | | |
- close
- close
- close
- close
| |||||||||
This excerpt taken from the WEN 10-K filed Feb 29, 2008. Revenue
Recognition
Net sales
by Company-owned restaurants are recognized upon delivery of food to the
customer. Net sales excludes sales taxes collected from the Company’s
customers which are instead recorded in “Accrued expenses and other current
liabilities” in the consolidated balance sheets. Royalties from
franchised restaurants are based on a percentage of net sales of the franchised
restaurant and are recognized as earned. Initial franchise fees are
recorded as deferred income when received and are recognized as revenue when a
franchised restaurant is opened since all material services and conditions
related to the franchise fee have been substantially performed by the Company
upon the restaurant opening. Franchise fees for multiple area
development agreements represent the aggregate of the franchise fees for the
number of restaurants in the area being developed and are recorded as deferred
income when received and are recognized as revenue when each restaurant is
opened in the same manner as franchise fees for individual
restaurants. Renewal franchise fees are recognized as revenue when
the license agreements are signed and the fee is paid since there are no
material services and conditions related to the renewal franchise
fee. Franchise commitment fee deposits are forfeited and recognized
as revenue upon the termination of the related commitments to open new
franchised restaurants. Rental income, including reimbursement of
rent related expenses, from locations owned by the Company and leased to
franchisees is recognized on a straight-line basis over the respective operating
lease terms. - 67
-
TRIARC
COMPANIES, INC. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
December
30, 2007
Asset
management and related fees, which are no longer being received as a result of
the Deerfield Sale, consisted of the following types of revenues generated by
the Company in its capacity as the investment manager for various investment
funds and private investment accounts (collectively with the REIT, the “Funds”)
and as the collateral manager for various CDOs: (1) management fees,
(2) incentive fees and (3) other related fees. Management fees were
recognized as revenue when the management services had been performed for the
period and sufficient cash flows had been generated by the CDOs to pay the fees
under the terms of the related management agreements. In connection
with these agreements, the Company had subordinated receipt of certain of its
management fees which were not recognized until they were no longer
subordinated. In addition, the Company recognized non-cash management
fee revenue related to its restricted stock and stock options in the REIT based
on their then current fair values which were amortized from deferred income to
revenues over the vesting period. Incentive fees were based upon the
performance of the Funds and CDOs and were recognized as revenues when the
amounts became fixed and determinable upon the close of a performance period for
the Funds and all contingencies were resolved. Contingencies may have
included the achievement of minimum CDO or Fund performance requirements
specified under certain agreements with some investors to provide minimum rate
of return or principal loss protection. Other related fees primarily
included structuring and warehousing fees earned by the Company for services
provided to CDOs and were recognized as revenues upon the rendering of such
services and the closing of the respective CDO.
Advertising
Costs
The
Company incurs various advertising costs, including contributions to certain
advertising cooperatives based upon a percentage of net sales by Company-owned
restaurants. The Company accounts for contributions made by the
Company-owned restaurants to advertising cooperatives as an expense the first
time the related advertising takes place. In addition, through 2005
the Company made certain contributions to AFA, which were not dependent on net
sales, specifically as part of a national cable television advertising campaign,
which were also expensed the first time the related advertising took
place. All other advertising costs are expensed as
incurred. Substantially all of the “Advertising and promotions”
expenses in the accompanying consolidated statements of operations for 2005,
2006 and 2007 represent advertising costs.
Casualty
Insurance
The
Company self-insures certain of its casualty insurance. The Company
provides for its estimated cost to settle both known claims and claims incurred
but not yet reported. Liabilities associated with these claims are
estimated, in part, by considering the frequency and severity of historical
claims, both specific to the Company as well as industry-wide loss experience,
and other actuarial assumptions.
Leases
The
Company accounts for leases in accordance with SFAS No. 13, “Accounting for
Leases” and other related authoritative guidance which require that leases be
evaluated and classified as operating leases or capital leases for financial
reporting purposes. When determining the lease term for operating and
capital leases, the Company includes option periods for which failure to renew
the lease imposes an economic penalty in such an amount that a renewal appears,
at the inception of the lease, to be reasonably assured. The primary
penalty to which we are subject is the economic detriment associated with the
existence of leasehold improvements which might be impaired if we choose not to
exercise the available renewal options.
For operating leases, minimum lease
payments, including minimum scheduled rent increases, are recognized as rent
expense on a straight line basis (“Straight-Line Rent”) over the applicable
lease terms and any periods during which the Company has use of the property but
is not charged rent by a landlord. Lease terms are generally for 20
years and, in most cases, provide for rent escalations and renewal
options.
Favorable
and unfavorable lease amounts are recorded as components of “Other intangible
assets” and “Other liabilities”, respectively, when the Company purchases
restaurants (see Note 3). Favorable leases are amortized to
“Depreciation and amortization, excluding amortization of deferred financing
costs” and unfavorable leases are amortized to “Cost of sales, excluding
depreciation and amortization” – both on a straight-line basis over the
remaining term of the leases. Upon early termination of a lease, the
favorable or unfavorable lease contract balance associated with the lease
contract is recognized as a loss or gain in the consolidated statement of
income.
Accounting
for Planned Major Maintenance Activities
Effective
January 1, 2007 the Company accounts for scheduled major aircraft maintenance
overhauls in accordance with the direct expensing method in accordance with the
provisions of FSP AIR-1. Under these provisions the actual cost of
such overhauls is recognized as expense in the period it is
incurred. Previously, the Company accounted for scheduled major
maintenance activities in accordance with the accrue-in-advance method under
which the estimated cost of such overhauls was recognized as expense in the
periods through the scheduled date of the respective overhaul with any
difference between estimated and actual costs recorded in results from
operations at the time of the actual overhaul. - 68
-
TRIARC
COMPANIES, INC. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
December
30, 2007
See Note
16 for further disclosure related to the Company’s adoption of FSP AIR-1 and
related adjustments to prior periods’ financial statements.
Reclassifications
Certain amounts included in the
accompanying prior years’ consolidated financial statements and footnotes
thereto have been reclassified to conform with the current year’s
presentation.
Materiality
of Unrecorded Adjustments
The
Company does not record all immaterial adjustments in its consolidated financial
statements. The Company performs a materiality analysis based on all
relevant quantitative and qualitative factors. Effective December 31,
2006 the Company quantifies materiality of unrecorded adjustments in accordance
with Staff Accounting Bulletin 108, “Considering the Effects of Prior Year
Misstatements when Quantifying Measurements in Current Year Financial
Statements” (“SAB 108”) issued by the Securities and Exchange Commission (the
“SEC”). The impact on the current year financial statements of
recording all potential adjustments, including both the carryover and reversing
effects of amounts not recorded in prior years, are
considered. Unrecorded adjustments are quantified using a balance
sheet and an income statement approach which considers both (1) the amount of
the misstatement originating in the current year income statement (generally
referred to as the “Rollover” approach) and (2) the cumulative amount of the
misstatements at the end of the current year (generally referred to as the “Iron
Curtain” approach). Prior to December 31, 2006, the Company used only
the Rollover approach to quantify the materiality of unrecorded
adjustments.
See Note
16 for further disclosure related to the Company’s adoption of SAB 108 and
related adjustment to retained earnings as of January 2, 2006.
(2) Significant Risks and Uncertainties
This excerpt taken from the WEN 10-K filed Mar 1, 2007. Revenue Recognition Net sales by Company-owned restaurants are recognized upon delivery of food to the customer. Net sales excludes sales taxes collected from the Company’s customers which are instead recorded in “Accrued expenses and other current liabilities” in the consolidated balance sheets. Royalties from franchised restaurants are based on a percentage of net sales of the franchised restaurant and are recognized as earned. Initial franchise fees are recorded as deferred income when received and are recognized as revenue when a franchised restaurant is opened since all material services and conditions related to the franchise fee have been substantially performed by the Company upon the restaurant opening. Franchise fees for multiple area development agreements represent the aggregate of the franchise fees for the number of restaurants in the area being developed and are recorded as deferred income when received and are recognized as revenue when each restaurant is opened in the same manner as franchise fees for individual restaurants. Renewal franchise fees are recognized as revenue when the license agreements are signed and the fee is paid since there are no material services and conditions related to the renewal franchise fee. Franchise commitment fee deposits are forfeited and recognized as revenue upon the termination of the related commitments to open new franchised restaurants. Through the third quarter of 2004, franchise fee credits under a discontinued restaurant remodel incentive program were recognized as a reduction of franchise fee revenue. These credits were recognized when a franchisee earned the available credits by opening new restaurants within the time frame allowed under the remodel program since the Company had 93
Triarc Companies, Inc. and Subsidiaries not incurred any obligation until the new restaurant was opened and the use of the credit did not result in any loss to the Company. Asset management and related fees consist of the following types of revenues generated by the Company in its capacity as the investment manager for various investment funds and private investment accounts
(collectively with the REIT, the “Funds”) and as the collateral manager for various CDOs: (1) management fees, (2) incentive fees and (3) other related fees. Management fees are recognized as revenue when the
management services have been performed for the period and sufficient cash flows have been generated by the CDOs to pay the fees under the terms of the related management agreements. In connection with these
agreements, the Company has subordinated receipt of certain of its management fees which are not recognized until they are no longer subordinated. In addition, the Company recognizes non-cash management fee
revenue related to its restricted stock and stock options in the REIT based on their current fair values which are amortized from deferred income to revenues over the vesting period. Incentive fees are based upon the
performance of the Funds and CDOs and are recognized as revenues when the amounts become fixed and determinable upon the close of a performance period for the Funds and all contingencies have been resolved.
Contingencies may include the achievement of minimum CDO or Fund performance requirements specified under certain agreements with some investors to provide minimum rate of return or principal loss protection.
Other related fees primarily include structuring and warehousing fees earned by the Company for services provided to CDOs and are recognized as revenues upon the rendering of such services and the closing of the
respective CDO. This excerpt taken from the WEN 8-K filed Oct 19, 2006. Revenue Recognition Revenues from the sale of food and beverages are recognized at the time the products are sold, and the cash is collected from the customer. This excerpt taken from the WEN 10-K filed Apr 3, 2006. Revenue Recognition Net sales of Company-owned restaurants are recognized upon delivery of food to the customer. Royalties from franchised restaurants are based on a percentage of net sales of the franchised restaurant and are recognized as earned. Initial franchise fees are recorded as deferred income when received and are recognized as revenue when a franchised restaurant is opened since all material services and conditions related to the franchise fee have been substantially performed by the Company upon the restaurant opening. Franchise fees for multiple area development agreements represent the aggregate of the franchise fees for the number of restaurants in the area being developed and are recorded as deferred income when received and are recognized as revenue when each restaurant is opened in the same manner as franchise fees for individual restaurants. Renewal franchise fees are recognized as revenue when the license agreements are signed and the fee is paid since there are no material services and conditions related to the renewal franchise fee. Franchise commitment fee deposits are forfeited and recognized as revenue upon the termination of the related commitments to open new franchised restaurants. Franchise fee credits under a discontinued restaurant remodel incentive program were recognized as a reduction of franchise fee revenue when a franchisee earned the available credits by opening new restaurants within the time frame allowed under the remodel program since the Company had not incurred any obligation until the new restaurant was opened and the use of the credit did not result in any loss to the Company. Asset management and related fees consist of the following types of revenues generated by the Company in its capacity as the investment manager for various investment funds and private investment accounts (collectively with the REIT, the “Funds”) and as the collateral manager for various CDOs: (1) management fees, (2) incentive fees and (3) other related fees. Management fees are recognized as revenue when the management services have been performed for the period and sufficient cash flows have been generated by the CDOs to pay the fees under the terms of the related management agreements. In connection with these agreements, the Company has subordinated receipt of certain of its management fees. In addition, the Company recognizes non-cash management fee revenue related to its restricted stock and stock options in the REIT based on their current fair values which are amortized from deferred income to revenues over the vesting period. Incentive fees are based upon the performance of the Funds and CDOs and are recognized as revenues when the amounts become fixed and determinable upon the close of a performance period for the Funds and all contingencies have been resolved. Contingencies may include the achievement of minimum CDO or Fund performance requirements specified under certain agreements with some investors to provide minimum rate of return or principal loss protection. Other related fees primarily include structuring and warehousing fees earned by the Company for services provided to CDOs and are recognized as revenues upon the rendering of such services and the closing of the respective CDO. This excerpt taken from the WEN 8-K filed Aug 26, 2005. Revenue Recognition Revenues from the sale of food and beverages are recognized at the time the products are sold and the cash is collected from the customer. | EXCERPTS ON THIS PAGE:
RELATED TOPICS for WEN: |
| |||||||
