SOCC, INC. dba
SEVEN OAKS COUNTRY CLUB
NOTES TO FINANCIAL STATEMENTS
Property and equipment: Property and equipment is recorded at cost with a capitalization policy of $5,000 or greater for items expected to be utilized by the Club in excess of one year. Depreciation is provided by using the straight-line method over the following estimated useful lives:
Years
Land improvements
3 - 20 3 - 40 3 - 20 3 - 10
Buildings and improvements Machinery and equipment
Furniture and fixtures Computer and software
3
Revenue recognition: •
In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606) . The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the guidance requires disclosure of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. • The Club recognizes revenue in accordance with FASB Accounting Standards Codification Topic 606, “ Revenue from Contracts with Customers, ” which provides a five-step model for recognizing revenue from contracts with customers as follows: o Identify the contract with the customer o Identify the performance obligation in the contract o Determine the transaction price o Allocate the transaction price to the performance obligations in the contract o Recognize revenue when or as performance obligations are satisfied • The Club is a not-for-profit entity with revenue derived from membership dues, golf-related fees, and retail sales from food, beverage and the golf pro shop. The Club ’ s products and services are marketed and sold to the Club ’ s members and their guests. Club results of operations are substantially affected by economic conditions and can be affected by member disposable income levels and spending habits. Membership dues: The Club records membership dues on the first of each month when billed and recognizes membership dues as revenue as the customer simultaneously receives and consumes the benefits of membership throughout the period. The timing of revenue recognition is monthly as the Club provides access to the benefits. • Food, beverage and sports activities: The Club records food, beverage and sports activities revenue from Club facilities upon delivery of these goods and services to the customer, which is when the performance obligation is satisfied. • Initiation fees: The Club records initiation fees not deemed as ownership transactions as deferred revenue when billed. The member ’ s right to renew without paying an additional initiation fee provides the member with a material right, which is accounted for as a separate performance obligation, and the Club recognizes revenue over the average term of a Club membership or when the member allows the option to renew to expire. Nature of products and services •
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