General Mills Inc. (GIS)
Analysis of Revenues
High level of difficulty
Accounting Policy on Revenue Recognition
General Mills’ revenues primarily result from contracts with customers, which are generally short-term and have a single performance obligation – the delivery of product. General Mills recognizes revenue for the sale of packaged foods at the point in time when the performance obligation has been satisfied and control of the product has transferred to the customer, which generally occurs when the shipment is accepted by the customer. Sales include shipping and handling charges billed to the customer and are reported net of variable consideration and consideration payable to General Mills’ customers, including trade promotion, consumer coupon redemption and other costs, including estimated allowances for returns, unsalable product, and prompt pay discounts. Sales, use, value-added, and other excise taxes are not included in revenue. Trade promotions are recorded using significant judgment of estimated participation and performance levels for offered programs at the time of sale. Differences between estimated expenses and actual costs are recognized as a change in management estimate in a subsequent period. General Mills generally does not allow a right of return. However, on a limited case-by-case basis with prior approval, General Mills may allow customers to return product. In limited circumstances, product returned in saleable condition is resold to other customers or outlets. Receivables from customers generally do not bear interest. Payment terms and collection patterns are short-term, and vary around the world and by channel, and as such, General Mills does not have any significant financing components. General Mills’ allowance for doubtful accounts represents the estimate of probablenon-payments and credit losses in the existing receivables, as determined based on a review of past due balances and other specific account data. Account balances are written off against the allowance when General Mills deems the amount is uncollectible. General Mills does not have material contract assets or liabilities arising from the contracts with customers.
Source: 10-K (filing date: 2019-06-28).
Revenues as Reported
General Mills Inc., Income Statement, Revenues
US$ in thousands
|12 months ended||May 26, 2019||May 27, 2018||May 28, 2017||May 29, 2016||May 31, 2015||May 25, 2014|
|Baking mixes and ingredients|
|Super-premium ice cream|
Based on: 10-K (filing date: 2019-06-28), 10-K (filing date: 2018-06-29), 10-K (filing date: 2017-06-29), 10-K (filing date: 2016-06-30), 10-K (filing date: 2015-07-06), 10-K (filing date: 2014-07-03).
|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).||General Mills Inc.’s net sales increased from 2017 to 2018 and from 2018 to 2019.|