SkyWest Airlines 2015 Annual Report Download - page 70

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66
In the event that the contractual rates under the agreements have not been finalized at quarterly or annual
financial statement dates, the Company records revenues based on the lower of prior period’s approved rates, as adjusted
to reflect any contract negotiations and the Company’s estimate of rates that will be implemented in accordance with
revenue recognition guidelines. In the event the Company has a reimbursement dispute with a major partner, the
Company evaluates the dispute under its established revenue recognition criteria and, provided the revenue recognition
criteria have been met, the Company recognizes revenue based on management’s estimate of the resolution of the
dispute.
In several of the Company’s agreements, the Company is eligible for incentive compensation upon the
achievement of certain performance criteria. The incentives are defined in the agreements and are being measured and
determined on a monthly, quarterly or semi-annual basis. At the end of each period, the Company calculates the
incentives achieved during that period and recognizes revenue accordingly.