Analysis of Revenues
Accounting Policy on Revenue Recognition
Sales are recognized at an amount that reflects the consideration to which Walgreens Boots Alliance expects to be entitled in exchange for transferring control of goods or services to the customer. Sales are reported on the gross amount billed to a customer less discounts if it has earned revenue as a principal from the sale of goods and services. Sales are reported on the net amount retained (that is, the amount billed to the customer less the amount paid to a vendor) if it has earned a commission or a fee as an agent.
Retail Pharmacy USA and Retail Pharmacy International
Walgreens Boots Alliance recognizes revenue, net of taxes and expected returns, at the time it sells merchandise or dispenses prescription drugs to the customer. Walgreens Boots Alliance estimates revenue based on expected reimbursements from third-party payers (e.g., pharmacy benefit managers, insurance companies and governmental agencies) for dispensing prescription drugs. The estimates are based on all available information including historical experience and are updated to actual reimbursement amounts.
Wholesale revenue is recognized, net of taxes and expected returns, upon shipment of goods, which is generally also the day of delivery.
Loyalty programs and gift cards
Walgreens Boots Alliance’s loyalty rewards programs represent a separate performance obligation and are accounted for using the deferred revenue approach. When goods are sold, the transaction price is allocated between goods sold and loyalty points awarded based upon the relative standalone selling price. The revenue allocated to the loyalty points is recognized upon redemption. Loyalty programs breakage is recognized as revenue based on the redemption pattern.
Customer purchases of gift cards are not recognized as revenue until the card is redeemed. Gift card breakage (i.e., unused gift card) is recognized as revenue based on the redemption pattern.
Source: 10-K (filing date: 2019-10-28).
Revenues as Reported
Walgreens Boots Alliance Inc., Income Statement, Revenues
US$ in millions
|12 months ended:||Aug 31, 2019||Aug 31, 2018||Aug 31, 2017||Aug 31, 2016||Aug 31, 2015||Aug 31, 2014|
|Retail Pharmacy USA|
|Retail Pharmacy International|
|Sales to external customers|
Based on: 10-K (filing date: 2019-10-28), 10-K (filing date: 2018-10-11), 10-K (filing date: 2017-10-25), 10-K (filing date: 2016-10-20), 10-K (filing date: 2015-10-28), 10-K (filing date: 2014-10-20).
|Sales to external customers||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).||Walgreens Boots Alliance Inc.’s sales to external customers increased from 2017 to 2018 and from 2018 to 2019.|