• KevonLooney@lemm.ee
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    10 months ago

    Why would you comment on something you know nothing about?

    Basic gift card revenue recognition

    Companies cannot recognize revenue upon the initial sale of a gift card because of a key revenue recognition principle that states that revenue is recognized when or as an entity satisfies a performance obligation by transferring a promised good or service to a customer.

    https://blog.leapfin.com/how-to-properly-recognize-gift-card-revenue

    • xordos@lonestarlemmy.mooo.com
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      10 months ago

      This is a good read. And also looks like it does mentioned unredeemed gc balance can be (partially) considered as breakage income? ( I don’t know anything about accounting, just want to point this out)

    • Lauchs@lemmy.world
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      10 months ago

      Ha, completely forgot about this.

      You should read that article carefully though. They even outline why this is a money maker later:

      You might be wondering, how did I get $1650 in total revenue from a $1500 sale? Well, it’s true, because you were able to take 10% of the gift card in breakage income, and on an individual order/customer it can look funny, but on the whole, with your P&L, it’ll be offset by another gift card purchase not being used and money that was “indefinitely deferred!”

      So, uhhh, I guess I’d ask, why would you comment on something about which you know nothing?