Tag Archives: unearned revenue

How should AmTrust have accounted for the sales of its extended warranty plans to avoid restating three years of financial statements?

AmTrust Financial Services, Inc., (NASDAQ: AFSI) is a multinational property and casualty insurance company headquartered in New York.  In 2017, the company had to restate three years of financial statements due to several accounting errors, the key one being how it accounted for extended warranties. AmTrust provides extended-service plans (ESP) for automobiles and other consumer […]

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How are Adele’s financial statements impacted when tickets to her North American tour sell out within a few minutes?

Adele released her third album, 25, in late 2015, quickly shattering several records. The album 25 was the first album to sell more than three million copies in a week and also racked up the most records sold in a week with 3.38 million records sold that first week. Her single Hello from 25 was […]

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When does SurveyMonkey recognize revenue from its Platinum annual subscription plans?

SurveyMonkey is an online survey company that allows its subscribers to customize and administer surveys.  It recently made the news for raising another $250 million in equity funding (“SurveyMonkey is worth $2 billion after new $250 million fundraising round, Fortune, December 15, 2014.)  (Note: SurveyMonkey is privately held.  The founder says the company will not […]

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What does Walt Disney’s Form 10-K communicate about its unearned revenue and accrued revenue?

Over the past year, The Walt Disney Company (DIS) has made the news because it increased its ticket prices at Walt Disney World in Florida, Disneyland Park in California, and other parks around the world.  Ticket revenue, however, is not its only source of revenue. The following is an excerpt from the Notes to Consolidated […]

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When does Carnival Cruise Lines recognize revenues and expenses for its cruises?

Carnival Cruise Lines had a record-breaking month in January 2014 in terms of number of net bookings (new bookings less cancellations.) During January 2014, Carnival booked more than 565,000 (net) guests for cruises to be taken over the next two years. Part of the reason that Carnival may be seeing increased bookings is its new […]

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How does Starbucks account for gift card sales?

In December 2013, Starbucks was predicting it would have record gift card sales for the year. Last year (2012), Starbucks sold more than 2 million gift cards on the Thursday before Christmas, which was a rate of more than 1,500 gift cards per minute. In 2013, Starbucks expects to top that figure.  For the entire […]

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