LMSB-4-0608-038
Rev. 06-2008
A. Regarding your gift certificate/gift card program, please provide the following:
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A description of the accounting and record-keeping policies and procedures for your gift card/certificate program to include when gift card income is recognized for book and for tax purposes. If revenue recognition differs between book and tax, address how such differences are reconciled and reported on the Sch. M-3.
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Copies of your accounting manual and all internal audit reports issued for gift cards.
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A list of all the general ledger accounts you use to record gift card transactions.
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A list of the book and tax accounting entries you make to record gift card: a. sales; b. redemptions; c. expirations; d. escheatments; f. discounts; g. dormancy or other fees; and h. any other transactions.
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Are your gift cards reloadable? If yes, how do you track the re-loads?
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Do you use a separate legal entity to manage your gift card program? If yes, please provide details of the arrangement to include the name and the type (e.g., C-corp., LLC, S-corp.) of entity created, when it was created, where it is chartered, if applicable, and generally how the program works.
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Do you issue gift cards in lieu of cash refunds? If yes, please indicate how you account for this transaction.
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Do you give gift cards as charitable contributions? If yes, please detail your policy.
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Do you have any restrictions listed on the card? If yes, please describe and provide a photocopy of the front and back of the gift card(s) which you and any of your subsidiaries issued during taxable year(s) _______.
B. If you defer gift card income, please provide responses to the following:
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Under what method are you deferring income and how did you elect the method?
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How do you track gift cards? Do you use an estimate? Do you use an outside service provider? If yes, please provide a copy of the service contract.
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Do you recognize an estimated cost of goods sold deduction to the extent unredeemed gift cards are recognized as income for tax purposes? If yes, please detail your policy.
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