LensCrafters 2015 Annual Report Download - page 107

Notes to the consolidated financial statement as of December 31, 2015 Page 13 di 68
1 the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue from rendering of services is recognized by reference to the stage of completion of the transaction involving the
rendering of services at the reporting date and when the outcome of the transaction can be estimated reliably. In particular,
when all of the following conditions have been satisfied:
1 the amount of revenues can be measured reliably;
1 it is probable that the economic benefits associated with the transaction will flow to the Group;
1 the stage of completion of the transaction at the end of the reporting period can be measured reliably; and
1 the costs incurred for the transaction and the costs to compete the transaction can be measured reliably.
Wholesale division revenues are recognized at the time goods are delivered to the customer. The Group records an accrual for
the estimated amounts to be returned against revenue. This estimate is based on the Group’s right of return policies and
practices along with historical data and sales trends. There are no other post-shipment obligations other than the product
warranty, if required by the law. Revenues received for the shipping and handling of goods are included in sales and the costs
associated with shipments to customers are included in operating expenses.
Retail division revenues are recognized upon receipt of the goods by the customer at the retail location. In some countries, the
Group allows retail customers to return goods for a period of time and, as such, the Group records an accrual for the estimated
amounts to be returned against revenue. This accrual is based on the historical return rate as a percentage of net sales and the
timing of the returns from the original transaction date, and is periodically reassessed. There are no other post-shipment
obligations other than the product warranty, if required by the law. Additionally, the retail division enters into discount
programs and similar relationships with third parties that have terms of twelve or more months. Customers who present a valid
membership card typically receive a fixed percentage discount off the retail prices for a specified range of product and/or
services. Revenues under these arrangements are recognized upon receipt of the products or services by the customer at the
retail location. Advance payments and deposits from customers are not recorded as revenues until the product is delivered. The
retail division also includes managed vision care revenues consisting of both fixed fee and fee for service managed vision care
plans. For fixed fee plans, the plan sponsor pays the Group a monthly premium for each enrolled subscriber. Premium revenue
is recognized as earned during the benefit coverage period. Premiums are generally billed in the month of benefit coverage.
Any unearned premium revenue is deferred and recorded within other current liabilities on the consolidated statement of
financial position. For fee for service plans, the plan sponsor pays the Company a fee to process its claims. Revenue is
recognized as the services are rendered. For these programs, the plan sponsor is responsible for funding the cost of claims.
Accruals are established for amounts due under these relationships estimated to be uncollectible.
Franchise revenues based on sales by unconsolidated franchisees (such as royalties) are accrued and recognized as earned.
Initial franchise fees are recorded as revenue when all material services or conditions relating to the sale of the franchise have
been substantially performed or satisfied by the Group and when the related store begins operations. Allowances are established
for amounts due under these relationships when they are determined to be uncollectible.
The Group licenses to third parties the rights to certain intellectual property and other proprietary information and recognizes
royalty revenues when earned.
Free frames given to customers as part of a promotional offer are recorded in cost of sales at the time they are delivered to the