USA What counts as Revenue?

[bobAnInvestorNJ]

Imagine a movie theater (or a chain of movie theaters) is showing the XYZ movie produced by one of the major movie producers. The movie theater agreement with the producer is that the theater will charge each patron $10 and the theater will keep $5 and give $5 to the producer. Can the movie theater count the
entire $10 it receives per ticket as revenue? or should it just count $5 of revenue per ticket?

 

[kirby]

Count the $10 as revenue.

 

[vpryce]

Imagine a movie theater (or a chain of movie theaters) is showing the XYZ movie produced by one of the major movie producers. The movie theater agreement with the producer is that the theater will charge each patron $10 and the theater will keep $5 and give $5 to the producer. Can the movie theater count the
entire $10 it receives per ticket as revenue? or should it just count $5 of revenue per ticket?

I think in this circumstance the the Movie Theater would record $10 per the number of tickets sold as Revenue and similarly $5 per the number of tickets as Cost of Sales. This was provide the Theater with a 50% Gross Profit Margin.

 

[UKFCA_London]

You can sometimes offset eg settlement discounts against revenue, but those reflect the actual amount paid from the same counterparty to the revenue transaction. Here the revenue from the customer is $10: the amount paid to the producer is a separate transaction with a separate counterparty, so a cost of $5