Analysis of Revenues
Difficulty level: Advanced
Sales are recognized when revenue is realized or realizable and has been earned. Revenue transactions represent sales of inventory. The revenue recorded is presented net of sales and other taxes P&G collects on behalf of governmental authorities. The revenue includes shipping and handling costs, which generally are included in the list price to the customer. P&G's policy is to recognize revenue when title to the product, ownership and risk of loss transfer to the customer, which can be on the date of shipment or the date of receipt by the customer.
A provision for payment discounts and product return allowances is recorded as a reduction of sales in the same period the revenue is recognized.
Trade promotions, consisting primarily of customer pricing allowances, merchandising funds and consumer coupons, are offered through various programs to customers and consumers. Sales are recorded net of trade promotion spending, which is recognized as incurred, generally at the time of the sale. Most of these arrangements have terms of approximately one year. Accruals for expected payouts under these programs are included as accrued marketing and promotion in the Accrued and other liabilities line item in the Consolidated Balance Sheets.
Source: Procter & Gamble Co., Annual Report
Procter & Gamble Co., Income Statement, Revenues
USD $ in millions
|12 months ended||Jun 30, 2015||Jun 30, 2014||Jun 30, 2013||Jun 30, 2012||Jun 30, 2011||Jun 30, 2010|
|Beauty, Hair and Personal Care||18,135||19,507||19,956||20,318||19,937||19,258|
|Snacks and Pet Care||–||–||–||–||3,156||3,135|
|Fabric Care and Home Care||22,277||26,060||27,448||27,254||24,837||23,805|
|Baby, Feminine and Family Care||20,247||20,950||16,790||16,493||15,606||14,736|
Source: Procter & Gamble Co. Annual Reports
|Net sales||Aggregate revenue recognized during the period (derived from goods sold, services rendered, insurance premiums, or other activities that constitute an entity's earning process). For financial services companies, also includes investment and interest income, and sales and trading gains.||Procter & Gamble Co.'s net sales declined from 2013 to 2014 and from 2014 to 2015.|