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Walt Disney Co. (NYSE:DIS)
Analysis of Revenues
Advanced level
Accounting Policy on Revenue Recognition
Disney generates revenue from the sale of both services and products. Revenue is recognized when control of the services or products is transferred to the customer. The amount of revenue recognized reflects the consideration Disney expects to receive in exchange for the services or products.
Disney has four broad categories of service revenues: licenses of rights to use the intellectual property, sales to guests at the Parks and Experiences businesses, sales of advertising time/space and DTC services. Disney’s primary product revenues include the sale of food, beverage and merchandise at the parks, resorts and retail stores and the sale of film and television productions in physical formats (DVD and Blu-ray).
The new revenue guidance defines two types of licenses of intellectual property (“IP”): IP that has “standalone functionality,” which is called functional IP, and all other IP, which is called symbolic IP. Revenue related to the license of functional IP is generally recognized upon delivery (availability) of the IP to the customer. The substantial majority of Disney’s film and television content distribution activities at the Media Networks, Studio Entertainment and DTCI segments is considered licensing of functional IP. Revenue related to the license of symbolic IP is generally recognized over the term of the license. Disney’s primary revenue stream derived from symbolic IP is the licensing of trade names, characters and visual and literary properties at the Parks, Experiences and Products segment.
Source: 10-K (filing date: 2019-11-20).
Revenues as Reported
Walt Disney Co., Income Statement, Revenues
US$ in millions
Based on: 10-K (filing date: 2019-11-20), 10-K (filing date: 2018-11-21), 10-K (filing date: 2017-11-22), 10-K (filing date: 2016-11-23), 10-K (filing date: 2015-11-25), 10-K (filing date: 2014-11-19).
| Item | Description | The company |
|---|---|---|
| Consolidated revenues, third parties | 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). | Walt Disney Co.’s consolidated revenues, third parties increased from 2017 to 2018 and from 2018 to 2019. |