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Microsoft Excel LibreOffice Calc

United Parcel Service Inc. (UPS)

Analysis of Revenues

Difficulty: Advanced

Revenue Recognition Accounting Policy

U.S. Domestic and International Package Operations

Revenue is recognized over time as UPS performs the services in the contract.


Freight forwarding revenue and the expense related to the transportation of freight are recognized over time as UPS performs the services. Truckload brokerage revenue and related transportation costs are recognized over time as UPS performs the services. Customs brokerage revenue is recognized upon completing documents necessary for customs entry purposes.


In the Logistics business UPS has a right to consideration from customers in an amount that corresponds directly with the value to the customers of the performance completed to date, and as such UPS recognizes revenue in the amount to which UPS has a right to invoice the customer.

UPS Freight

Revenue is recognized over time as UPS performs the services in the contract.

In the transportation businesses, UPS utilizes independent contractors and third-party carriers in the performance of some transportation services. U.S. GAAP requires UPS to evaluate whether UPS’ businesses themselves promise to transfer services to the customer (as the principal) or to arrange for services to be provided by another party (as the agent) using a control model. Based on the evaluation of the control model, UPS determined that all of the major businesses act as the principal rather than the agent within their revenue arrangements. Revenue and the associated purchased transportation costs are reported on a gross basis within UPS’ statements of consolidated income.

Financial Services

Income on loans and direct finance leases is recognized on the effective interest method. Accrual of interest income is suspended at the earlier of the time at which collection of an account becomes doubtful or the account becomes 90 days delinquent. Income on operating leases is recognized on the straight-line method over the terms of the underlying leases.

Source: 10-K (filing date: 2019-02-21).

Revenues as Reported

United Parcel Service Inc., Income Statement, Revenues

US$ in millions

Microsoft Excel LibreOffice Calc
12 months ended Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
U.S. Domestic Package hidden hidden hidden hidden hidden
International Package hidden hidden hidden hidden hidden
Supply Chain & Freight hidden hidden hidden hidden hidden
Revenue hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-21), 10-K (filing date: 2017-02-21), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-27).

Item Description The company
Revenue 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). United Parcel Service Inc.’s revenue increased from 2016 to 2017 and from 2017 to 2018.