SOCC, INC. dba
SEVEN OAKS COUNTRY CLUB
NOTES TO FINANCIAL STATEMENTS
• Sales and use taxes: The Club collects and remits sales and use taxes to customers at the time of dues and initiation fees billing and at the point of sale for retail transactions and reports such amounts under the net method on the statements of activities. Accordingly, these taxes are not included in gross revenue. • Payment terms for dues, goods and services to members are billed to member accounts and are typically due in 30 days. Consideration for goods and services delivered to non-members is due at the point of sale. In instances where the timing of revenue recognition differs from the timing of the right to invoice, the Club has determined that a significant financing component does not exist. The primary purpose of the Club ’ s invoicing terms is to provide members with simplified and predictable ways of purchasing products and services and not to receive financing from or providing financing to the member. Additionally, the Club has elected the practical expedient that permits the Club to not recognize a significant financing component if the time between the transfer of a good or service and payment is one year or less.
• As discussed previously, revenue from retail sales and golf activities is recognized at a point in time, whereas membership dues are recognized over time.
Transaction price •
The transaction price of goods and services from food, beverage and sports activities is the amount of consideration to which the Club expects to be entitled in exchange for transferring goods and services to the customer. Revenue from sales of food and beverage, pro shop merchandise and golf activities is recorded based on the fixed transaction price. • Customers are granted the right to return merchandise within 30 days of purchase. The Club does not deem recording of variable consideration on retail transactions necessary as merchandise returns historically have not had a significant impact on the Club ’ s retail merchandise revenue. The Club records accounts receivable when it has the unconditional right to issue an invoice and receive payment, regardless of whether revenue has been recognized. When consideration is received and revenue has not yet been recognized, a contract liability (deferred revenue) also is recorded. The Club does not recognize revenue in advance of the right to invoice and therefore has not recorded a contract asset. Membership transactions : Membership transfer fees, initiation fees, and proceeds from the sale of proprietary memberships are recorded in the period that the Board of Governors approve the membership. The Club ’ s current practice is to allocate initiation and transfer fees, excluding proceeds from the sale of proprietary memberships, to operations. Assessments are recognized as additions to net assets without donor restrictions when approved by the Board of Governors and billed to the members. Contract balances • Operating income/performance measurement: The Club considers the excess of revenues over expenses before other revenues (expenses) and other changes in net assets without donor restrictions in the accompanying statements of activities to be operating income for performance measurement purposes, as this is the line item they budget for financial management and internal reporting purposes.
Deferred revenue: Dues and initiation fees billed in advance represent funds received for services to be provided in the subsequent year.
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