Gaming Entities Revenue Recognition Task Force 


AICPA Revenue Recognition Task Forces are charged with developing revenue recognition implementation issues that will provide helpful hints and illustrative examples for how to apply the new Revenue Recognition Standard.

Task Force Members:

  • Karl Brunner, Deloitte & Touche LLP (Chair)
  • Frank Albarella, KPMG LLP
  • Bruce Bleakman, REDW LLC
  • Tom Haas, American Casino & Entertainment Properties, LLC
  • Kevin Karo, BDO USA LLP
  • Richard Lobdell, Osage Casinos
  • Sam Marcozzi, Grant Thornton LLP
  • Anthony D. McDuffie, Boyd Gaming Corporation
  • John Page, PricewaterhouseCoopers LLP
  • Patrick Pruitt, Ernst & Young LLP
  • Sandra Schulze, International Gaming Technology
  • Mike Winterscheidt, Scientific Games Corporation
Staff Contact: Kim Kushmerick, kkushmerick@aicpa.org

IDENTIFIED REVENUE RECOGNITION IMPLEMENTATION ISSUES

Below is a list of potential revenue recognition implementation issues identified by the Gaming Entities Revenue Recognition Task Force. The list will be updated as the task force continues it discussions. Full revenue recognition implementation issues will be posted below for informal comments after review by the AICPA Financial Reporting Executive Committee (FinREC).

Issue # Description of Implementation Issue Status
1 Definitions: The terms "Win" and Gross Gaming Revenue
This implementation issue discusses considerations for gaming entities in applying ASC 606 and determining how to recognize and report revenue or losses from gaming transactions.
Finalized to be included in a future edition of the AICPA Guide Revenue Recognition
1a. Bet/Derivatives - Question to the TRG Question submitted to FASB TRG
2 Net Gaming Revenue
This implementation issue addresses how a gaming entity will continue to account for other adjustments (such as cash sales incentives and the change in progressive jackpot liabilities) as reductions of net gaming revenue.
Out for Exposure until February 1, 2017
3
Promotional Allowances
This implementation issue addresses the elimination of historical presentations within gross revenues on the income statement for free goods and services provided to customers (such as hotel revenues, food and beverage revenues and other integrated gaming resort revenues) wherein such reported revenue sources were presented on a grossed up basis for the retail value of the free goods and services provided and included in a total gross revenues balance for the reporting period. The presentation of gross revenues was reduced with an offsetting contra-revenue amount for the total retail value of such “promotional allowances” or “complimentaries”.
Out for Exposure until February 1, 2017
4
Accounting for Base and Incremental Progressive Jackpots Amounts
This implementation issue addresses a gaming operator’s accounting for base progressive and incremental progressive jackpot amounts,including accrual of the incremental progressive amount.
Out for Exposure until December 5, 2016
5
Wide Area Progressive operators’ accounting for base progressive and incremental progressive jackpots amounts
This implementation issue will discuss the timing for recognition of the WAP operator’s liability for base progressive and incremental progressive jackpot amounts
Submitted to AICPA RRWG
6
Wide Area Progressive operators’ fees received from gaming entities
This implementation issue will discuss how should the fees paid to a WAP Operator by a Gaming Entity should be presented on the income statement of the Gaming Entity, and how should the fees received by a WAP Operator from a Gaming Entity be presented on the income statement of the WAP Operator.
Submitted to AICPA RRWG
7
Participation and Similar Arrangements
8A
Loyalty and Other Incentive Programs without Tier Status
This implementation issue will discuss the accounting for loyalty credits and other discretionary incentives issued in conjunction with gaming activity.
Submitted to FinREC
8B Loyalty Tier Status
This implementation issue will discuss a framework for the assessment of whether “Tier Status” in an affinity program conveys a material right to goods and services and therefore gives rise to a separate performance obligation. This issue was developed jointly with the Airlines and Hospitality Task Forces.
Out for Exposure until February 1, 2017
9 Managing Properties for Third Parties
This implementation issue will discuss how a gaming entity should recognize revenue for managing a gaming property owned by a third party, and how to recognize costs of obtaining an agreement to manage a gaming property owned by a third party (the Managed Property).
Submitted to AICPA RRWG
10 Accounting for Jackpot Insurance Premiums and Recoveries
This implementation issue discusses the accounting for gaming chips or tokens associated with breakage, or that remain unredeemed when such chips or tokens are permanently discontinued under ASC 606.
Out for Exposure until September 1, 2016
11 Accounting for Gaming Chips and Tokens
This implementation issue discusses the accounting for gaming chips or tokens associated with breakage, or that remain unredeemed when such chips or tokens are permanently discontinued under ASC 606.
Out for Exposure until September 1, 2016
12 Accounting for Racetrack Fees
This implementation issue will discuss the accounting and presentation for (1) pari-mutuel racetrack wagers received from gaming customers by the entity responsible for the administration of a pari-mutuel pool (the “Pool”), usually the host racetrack gaming entity (the “Host Entity ”), (2) pari-mutuel racetrack wagers received from gaming customers by third party gaming entities (“Off-track Entity”) unrelated to the Host Entity who partially participates in the administration of the pari-mutuel pool by virtue of licenses and agreements which allow such parties to accept pari-mutuel wagers on behalf of the Host Entity and the Pool and (3) various fees directly or indirectly received by or paid to (a) a Host Entity related to its operations of the racetrack and the Pool or (b) an Off-track Entity related to the Pool and/or the related race event.
Submitted to AICPA RRWG
13 Illustrative Financial Statements


FEEDBACK REQUESTED

Draft Revenue Recognition Implementation Issues included for informal comment, when available, will be listed below.

Respondents should submit any comments including the implementation issue number to kkushmerick@aicpa.org by the dates noted below:

Issue # Comment Due Date
6-1 - Definitions: The terms "Win" and Gross Gaming Revenue September 1, 2016
6-2 - Net Gaming Revenue
February 1, 2017
6-3 - Promotional Allowances
February 1, 2017
6-8B - Loyalty Tier Status
February 1, 2017
6-10 - Accounting for Jackpot Insurance Premiums and Recoveries September 1, 2016
6-11 - Accounting for Gaming Chips and Tokens September 1, 2016
6-4 - Accounting for Base and Incremental Progressive Jackpots Amounts December 5, 2016


The Gaming Entities Revenue Recognition Task Force recommends the following AICPA products for current revenue recognition issues:



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