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One thing I am curious about from the finance perspective is - How does the revenue recognition (RevRec) happen in the internet ad business? If company A has co
by thisisit 9y ago
One thing I am curious about from the finance perspective is - How does the revenue recognition (RevRec) happen in the internet ad business? If company A has committed $200 million in ads over 6 months to Google. How will Google book and recognize this as revenue?
- matt4077 9y agoI'd be very surprised if it were any different than what's standard, which is to recognize the revenue when the product/service is delivered.
- thisisit 9y agoSure but the problem lies the exact definition of delivered. What does delivery mean here?
- JumpCrisscross 9y ago> How does the revenue recognition (RevRec) happen in the internet ad business? "Revenue from advertising is recognized when the goods or services have been delivered or provided, the amounts we charge are fixed or determinable, we and our advertisers or other customers understand the specific nature and terms of the agreed upon transactions, and collectability is reasonably assured. We recognize as revenues the amounts charged to advertisers each time a user engages with ads that appears next to the search results or content on Google properties or Google Network Members’ properties. For those advertisers using our cost-per-impression pricing, we recognize as revenues the amounts charged to advertisers each time their ads are displayed on Google properties or Google Network Members’ properties." TL; DR When an ad is clicked on or viewed. https://www.sec.gov/Archives/edgar/data/1652044/000165204417000008/goog10-kq42016.htm#s3E4BC361FFF558ED0BF02B6547BF76E0 https://www.sec.gov/Archives/edgar/data/1652044/000165204417... Alphabet Inc. Form 10-K FYE 2016 Disclaimer: this is not securities advice. Do not buy or sell securities based on my Internet comments.