Kraft Heinz Co. (KHC)
Analysis of Revenues
Accounting Policy on Revenue Recognition
Kraft Heinz’s revenues are primarily derived from customer orders for the purchase of the products. Kraft Heinz recognizes revenues as performance obligations are fulfilled when control passes to the customers. Kraft Heinz records revenues net of variable consideration, including consumer incentives and performance obligations related to trade promotions, excluding taxes, and including all shipping and handling charges billed to customers (accounting for shipping and handling charges that occur after the transfer of control as fulfillment costs). Kraft Heinz also records a refund liability for estimated product returns and customer allowances as reductions to revenues within the same period that the revenue is recognized. Kraft Heinz bases these estimates principally on historical and current period experience factors. Kraft Heinz recognizes costs paid to third party brokers to obtain contracts as expenses as the contracts are generally less than one year.
Source: 10-K (filing date: 2019-06-07).
Revenues as Reported
Kraft Heinz Co., Income Statement, Revenues
US$ in millions
|Net sales||Amount of revenue recognized from goods sold, services rendered, insurance premiums, or other activities that constitute an earning process. Includes, but is not limited to, investment and interest income before deduction of interest expense when recognized as a component of revenue, and sales and trading gain (loss).||Kraft Heinz Co.’s net sales decreased from 2016 to 2017 but then slightly increased from 2017 to 2018.|