Southwest Airlines (LUV)) Message Board

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Non-Tech : Southwest Airlines (LUV))

LUV 30.30

+0.7%

Oct 31 9:30 AM EST

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From: msteamshovelm	6/30/2016 5:41:57 PM
	of 299

When I was reading through SouthWest Airline's 10-K today I found something very interesting, they gave themselves a special charge on their revenue of $172m. "The Company followed the transition approach of ASU 2009-13, which required that the Company adjust the existing deferred revenue balance to reflect the value, on a relative selling price basis, of any undelivered element remaining at the date of contract modification. The relative selling price of the undelivered element (air transportation) was lower than the rate at which it had been deferred under the previous contract, and the Company recorded a one-time, non-cash adjustment to decrease frequent flyer deferred revenue and increase revenue through the recording of a Special revenue adjustment of $172 million." This doesn't add up, the selling price of their deferred revenue went down, so why would they gain $172m in actual revenue? I'm skeptical. Thanks msteam

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