Gift Card Breakage Accounting

The holiday season is quickly approaching, and gift card promotions remain top of mind for management. However, a tricky part of gift card accounting is the “breakage analysis” which can result in revenue recognition before a gift card is redeemed in full. 

You may recall, prior to the adoption of ASC 606, that several private companies would observe the industry standard and wait to recognize breakage until after two years of gift card inactivity. In 2019, the method of recognizing breakage changed and accelerated the recognition of revenue related to gift card breakage. 

We are pleased to continue our gift card accounting conversation exploring the impact of ASC 606 on breakage calculations. Ensure accounting compliance by reviewing this guidance and sample calculation today. 

Upcoming Webinar:
PPP Loan Necessity
Questionnaire

The SBA has created a new information request form titled “Paycheck Protection Program Loan Necessity Questionnaire” with two versions: for-profit (Form 3509) and non-profit (Form 3510). Join us to explore these forms and the actions you should take now.

 PPP Loans Over
$2 Million Face
Additional Requests

Borrowers with PPP loans of more than $2 million (including as aggregated by affiliated borrowers) will be required to file Form 3509 to document the economic uncertainty necessitating their loan. Review the information being collected by clicking here.

Financial Reporting
Updates For
Restaurants

As part of our Restaurant Masterclass Series, we hosted an interactive discussion exploring restaurant industry accounting and disclosure considerations. For insight from PPP loans to the applicability of various impairment models under GAAP, visit us online.

Dustin Minton

Director,
Restaurant Services

Kaz Unalan

Director, Tax & Business Advisory Services

Tom Powers

Director of
Assurance Services

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