Walmart Inc. (WMT)

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This ASU is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. Walmart adopted this ASU on February 1, 2018, using the modified retrospective approach and applied this ASU only to contracts not completed as of February 1, 2018. The impact of adopting this ASU was not material to the Consolidated Financial Statements.

Net Sales

Walmart recognizes sales revenue, net of sales taxes and estimated sales returns, at the time it sells merchandise to the customer. eCommerce sales include shipping revenue and are recorded upon delivery to the customer. Additionally, estimated sales returns are calculated based on expected returns.

Membership Fee Revenue

Walmart recognizes membership fee revenue both in the U.S. and internationally over the term of the membership, which is typically 12 months. Membership fee revenue was $1.4 billion for each of fiscal 2019, 2018 and 2017, respectively. Membership fee revenue is included in membership and other income in Walmart’s Consolidated Statements of Income. Deferred membership fee is included in accrued liabilities in Walmart’s Consolidated Balance Sheets.

Gift Cards

Customer purchases of gift cards are not recognized as sales until the card is redeemed and the customer purchases merchandise using the gift card. Gift cards in the U.S. and some countries do not carry an expiration date; therefore, customers and members can redeem their gift cards for merchandise and services indefinitely. Gift cards in some countries where Walmart does business have expiration dates. While gift cards are generally redeemed within 12 months, a certain number of gift cards, both with and without expiration dates, will not be fully redeemed. Management estimates unredeemed balances and recognizes revenue for these amounts in membership and other income in Walmart’s Consolidated Statements of Income over the expected redemption period. Management periodically reviews and updates its estimates.

Financial and Other Services

Walmart recognizes revenue from service transactions at the time the service is performed. Generally, revenue from services is classified as a component of net sales in Walmart’s Condensed Consolidated Statements of Income.

Source: 10-K (filing date: 2019-03-28).

Walmart Inc., Income Statement, Revenues

USD $ in millions

	12 months ended	Jan 31, 2019		Jan 31, 2018		Jan 31, 2017		Jan 31, 2016		Jan 31, 2015		Jan 31, 2014
	Walmart U.S.
	Walmart International
	Sam’s Club
	Net sales

Based on: 10-K (filing date: 2019-03-28), 10-K (filing date: 2018-03-30), 10-K (filing date: 2017-03-31), 10-K (filing date: 2016-03-30), 10-K (filing date: 2015-04-01), 10-K (filing date: 2014-03-21).