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How are Cyber Monday discounts reported according to GAAP accounting?

Let's say a company discounts a $600 item to $300 for Cyber Monday.  Is it recorded as $600 in revenue or $300?  Then, if it were $600, is $300 added to a sales discount leger?


Ken Stumder
Title: Finance Director / Controller
Company: Ken Stumder, CPA
(Finance Director / Controller, Ken Stumder, CPA) |

You'd report the net figure in revenue however you track the discount amount.

Topic Expert
Regis Quirin
Title: Director of Finance
Company: Gibney Anthony & Flaherty LLP
LinkedIn Profile
(Director of Finance, Gibney Anthony & Flaherty LLP) |

Specifically for GAAP - if you lower the price for cyber Monday, that is the price. Book revenue directly as Ken states. The only time you have a ledger effect is when you offer a discount on future purchases, based on purchases today, as you create a future liability.

Topic Expert
Barrett Peterson
Title: Senior Manager, Actg Stnds & Analysis
Company: TTX
(Senior Manager, Actg Stnds & Analysis, TTX) |

The $300 is your (net) revenue, usually recorded as a $600 credit to revenue and a $300 debit to a discount account reflected in the revenue caption in your financial statements. Discount accounts can facilitate analysis of promotions and average "sell-tdhrough" for retailers.


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