Insight Report 11 minutes PremiumUS Retail’s Updated Gift Card Guidelines: Accounting for Breakage and Bankruptcy Coresight Research February 24, 2021 What's InsideUS retailers witnessed a surge in gift cards sales in 2020. We discuss how US retailers account for gift card sales as well as unredeemed gift card balances under the Accounting Standards Codification (ASC) 606 update issued by the Financial Accounting Standards Board (FASB). We also cover retailers’ unused gift card liabilities, including Amazon, Target and Walmart, and how outstanding gift cards are managed in the event of retailer bankruptcies and liquidations. Click here to read our report on key trends impacting the US gifting market. CONTENTS What’s the Story? Why It Matters Gift Card Accounting: In Detail Accounting Entries for Sales and Redemption of Gift Cards Under FASB’s Updated Guidance Accounting Entries for Unredeemed Gift Cards Escheat Law ASC 606 Adoption Timeline Why Was the Overhaul of Financial Reporting Necessary? Gift Card Accounting by Leading US Retailers Retailers’ Liabilities: Bankruptcies and Liquidations What We Think Implications for Brands/Retailers This report is for paying subscribers only. Already a paying subscriber? Please log in to see the entire report.If you wish to learn more about our subscription plans and become a paying subscriber, click here. This document was generated for Other research you may be interested in: September 2023 US Housing Market Indicators: New Residential Construction Starts Drop to Lowest Point in Over Three YearsFebruary 2024 US Retail Sales: Growth Accelerates—Electronics Stores Rebound; Nonstore Retailers See Strong GrowthThree Data Points We’re Watching This WeekNovember 2023 China Retail Sales: Growth Continues To Strengthen
