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Revenue Recognition | 6 Months Ended
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Jul. 01, 2018
Revenue Recognition [Abstract] |
Revenue Recognition Policy | (2) Revenue Recognition Revenue Recognition Revenue is recognized when control of the promised goods is transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for transferring those goods. The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and collectability of consideration is probab le. Toy and Games The majority of the Company’s revenues are derived from sales of finished products to customers. Revenues from sales of finished products to customers account ed for 9 1% and 9 3% of the Company’s revenues for the six-month periods ended July 1, 2018 and July 2, 2017, respectively. When determining whether control of the finished products has transferred to the customer, the Company considers any future performance obligations. Generally, the Company has no post-shipment obligatio n on sales of finished products to customers and revenues from product sales are recognized upon passing of title to the customer, which is generally at the time of shipment. Any shipping and handling activities that are performed by the Company, whether b efore or after a customer has obtained control of the products, are considered activities to fulfill our obligation to transfer the products, and are recorded as incurred within selling, distribution, and administration expenses. For the quarters ended Jul y 1, 2018 and July 2, 2017 these costs were approximately $42,400 and $37,500, respectively, and for the six-month periods ended July 1, 2018 and July 2, 2017, these costs were approximately $83,900 and $74,100, respectively. The Company offers various di scounts, rebates, allowances, returns, and markdowns to its customers, (collectively, “allowances”), all of which are considered when determining the transaction price. Certain allowances are fixed and determinable at the time of sale and are recorded at the time of sale as a reduction to revenues. Other allowances can vary depending on future outcomes such as customer sales volume (“variable consideration”). The Company estimates the amount of variable consideration using the expected value method. In estimating the amount of variable consideration using the expected value method, the Company considers various factors including but not limited to: customer terms, historical experience, any expected deviations from historical experience, and existing or expected market conditions. The Company then records an estimate of variable consideration as a reduction to revenues at the time of sale. The Company adjusts its estimate of variable consideration at least quarterly or when facts and circumstances used in the estimation process may change. Historically, adjustments to estimated variable consideration have not been material. Entertainment and Licensing Revenues within the Company’s Entertainment and Licensing segment, which accounted for 8% and 6% of the Company’s revenues for the six-month periods ended July 1, 2018 and July 2, 2017, respectively, are recorded either over a period of time or at a point in time. The Company enters into contracts to license its intellectual property, which consists of its brands, in various channels including but not limited to: consumer products such as apparel or home goods, within formats such as on-line games, within venues such as theme parks, or within formats such as motion picture films. The licensees pay the Comp any either a sales-based or usage-based royalty, or a combination of both, for use of the brands, in some cases subject to minimum guaranteed amounts or fixed fees. The license of the Company’s brands provide access to the intellectual property over the t erm of the license, generally without any other performance obligation of the Company other than keeping the intellectual property active, and is therefore considered a right-to-access license of symbolic intellectual property. The Company records sales-b ased or usage-based royalty revenues for right-to-access licenses at the occurrence of the licensees’ subsequent sale or usage. When the arrangement includes a minimum guarantee, the Company records the minimum guarantee on a ratable basis over the term of the license period and does not record the sales-based or usage-based royalty revenues until they exceed the minimum guarantee. The Company also produces television or streaming programming for licensing to third parties. The licensees typically pay a f ixed fee for the license of the produced content. The content that the Company delivers to its licensees has stand-alone functionality, generally without any other performance obligation of the Company, and is therefore considered a right-to-use license o f functional intellectual property. The Company records revenues for right-to-use licenses once the license period has commenced and the licensee has the ability to use the delivered content. In arrangements where the licensee pays the Company a fixed fe e for multiple seasons or multiple series of programming, arrangement fees are recorded as revenues based upon their relative fair values. As of July 1, 2018, the Company did not have any material future performance commitments for film streaming or telev ision orders that have not yet been delivered. The Company also develops application based digital games featuring its brands within the games. These games are hosted by third-party platform providers. The Company does not charge a fee to the end users f or the download of the games or the ability to play the games. The end users make in-application purchases of digital currencies, via the Company’s platform providers, with such purchased digital currencies to be used in the games. The Company records re venues from in-application purchases based on the spending patterns of the players. For the majority of the Company’s digital games, players spend their currencies in the month of purchase, and therefore revenues are recorded at the time of sale. The Com pany has no additional performance obligations other than delivery of the currency via its platform providers. The Company controls all aspects of the goods delivered to the consumer. The third-party platform providers are providing only the service of h osting and administering receipt from the end users. The Company is the principal in the arrangement and revenues are recorded in net revenues inclusive of the fees charged by the third-party platform providers. The fee charged by the third-party platfor m providers to the Company are recorded within cost of sales. Contract Assets and Liabilities A contract asset is defined as an entity's right to consideration for goods or services that the entity has transferred to a customer. A contract liability is defined to occur if the customer's payment of consideration precedes the entity's performance and represents the entity's obligation to transfer goods or services to a customer for which the entity has received consideration. The Company occasionally will require payment from customers for finished product in advance of the customer receiving control of the finished product. In these situations, the Company defers revenue on the advanced payment until the customer has control of the finished product, gene rally within the next month. Within our Entertainment and Licensing segment, the Company may receive royalty payments from licensees in advance of the licensees’ subsequent sales to their customers, or in advance of the Company’s performance obligation be ing satisfied. The Company defers revenues on these advanced payments until its performance obligation is satisfied. The aggregate deferred revenues are recorded as liabilities and were $41,380, and $10,261 as of July 1, 2018 and December 31, 2017, respe ctively, and the changes in deferred revenues are not material to the Company’s consolidated statement of operations for the six-months ended July 1, 2018 and July 2, 2017. The Company records contract assets in the case of minimum guarantees that are bein g recognized ratably over the term of the respective license periods. At July 1, 2018 and July 2, 2017, these contract assets were not material to the Company’s consolidated balance sheets. Accounts Receivable and Allowance for Doubtful Accounts The Comp any’s accounts receivable on the consolidated balance sheets as of July 1, 2018, July 2, 2017 and Dec ember 31, 2017 are primarily from contracts with customers. In the six-months ended July 1, 2018, the Company recorded a bad debt charge of $59,115 relate d to a significant customer. The Company had no other material bad debt expense in the six-month period ended July 2, 2017 or the quarters ended on July 1, 2018 and July 2, 2017. Disaggregation of revenues The Company disaggregates its revenues from contracts with customers by segment: US and Canada, International, Entertainment and Licensing, and Global Operations. The Company further disaggregates revenues within its International segment by major geographic region: Europe, Latin America, and Asia Pacific. Finally, the Company disaggregates its revenues by brand portfolio into four brand categories: Franchise brands, Partner brands, Hasbro gaming, and Emerging brands. We believe these collectively depict how the nature, amount, t iming and uncertainty of revenue and cash flows are affected by economic factors. See Note 11, Segment Reporting, for further information.

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- Definition Disclosure of accounting policy for revenue recognition. If the entity has different policies for different types of revenue transactions, the policy for each material type of transaction is generally disclosed. If a sales transaction has multiple element arrangements (for example, delivery of multiple products, services or the rights to use assets) the disclosure may indicate the accounting policy for each unit of accounting as well as how units of accounting are determined and valued. The disclosure may encompass important judgment as to appropriateness of principles related to recognition of revenue. The disclosure also may indicate the entity's treatment of any unearned or deferred revenue that arises from the transaction. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=84158767&loc=d3e18823-107790 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 605 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB Topic 13.B.Q1) -URI http://asc.fasb.org/extlink&oid=65893310&loc=d3e214044-122780 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=84158767&loc=d3e18780-107790 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=84158767&loc=d3e18726-107790 + Details
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