Revenue Recognition Accounting Policy
Sales
Walmart recognizes sales revenue net of sales taxes and estimated sales returns at the time it sells merchandise to the customer.
Shopping Cards
Customer purchases of shopping cards are not recognized as revenue until the card is redeemed and the customer purchases merchandise using the shopping card. Shopping cards in the U.S. do not carry an expiration date and, therefore, customers and members can redeem their shopping cards for merchandise indefinitely. Shopping cards in certain foreign countries where Walmart does business may have expiration dates. A certain amount of shopping cards, both with and without expiration dates, will not be redeemed. Walmart estimates unredeemed shopping cards and recognizes revenue for these amounts over shopping card historical usage periods based on historical redemption rates. Walmart periodically reviews and updates its estimates of usage periods and redemption rates.
Financial and Other Services
Walmart recognizes revenue from financial and other service transactions at the time the service is performed. Generally, revenue from services is classified as a component of net sales in Walmart's Consolidated Statements of Income.
Membership Fee
Walmart recognizes membership fee revenue both in the United States and internationally over the term of the membership, which is 12 months.
Membership fee revenue is included in membership and other income in Walmart's Consolidated Statements of Income. The deferred membership fee is included in accrued liabilities in Walmart's Consolidated Balance Sheets.
Source: Wal-Mart Stores Inc., Annual Report
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