|
GENERAL (Policies)
|
6 Months Ended |
|---|---|
|
Jun. 30, 2014
|
|
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Revenue Recognition |
REVENUE RECOGNITION
Revenue from green fees, cart rentals, food and beverage sales, merchandise sales and other income (consisting primarily of range income, banquets, and club and other rental income) are generally recognized at the time of sale, when services are rendered and collection is reasonably assured.
Revenue from membership dues is recognized in the month earned. Membership dues received in advance are included in deferred revenues and recognized as revenue ratably over the appropriate period, which is generally twelve months or less. The monthly dues are generally structured to cover the club operating costs and membership services.
Private
country club members generally pay an advance initiation fee upon their acceptance as a member to the country club. Initiation
fees at most private clubs are deposits which are generally refundable 30 years after the date of acceptance as a member. Revenue
related to membership deposits is recognized over the expected life of an active membership. For membership deposits, the difference
between the amount paid by the member and the present value of the refund obligation is deferred and recognized on a straight-line
basis over the expected life of an active membership.
The present value of the refund obligation is recorded as a membership deposit liability in the consolidated balance sheets and accretes over the nonrefundable term (30 years) using the effective interest method. This accretion is recorded as interest expense in the consolidated statements of income.
|
| Expense Recognition |
EXPENSE RECOGNITION
Operating Leases and Other Operating Expenses - Other operating expenses for the Golf business consist primarily of equipment leases, utilities, repairs and maintenance, supplies, seed, soil and fertilizer, and marketing. Many of the golf properties and related facilities are leased under long-term operating leases. In addition to minimum payments, certain leases require payment of the excess of various percentages of gross revenue or net operating income over the minimum rental payments. The leases generally require the payment of taxes assessed against the leased property and the cost of insurance and maintenance. The majority of lease terms range from 10 to 20 years, and typically, the leases contain renewal options. Certain leases include minimum scheduled increases in rental payments at various times during the term of the lease. These scheduled rent increases are recognized on a straight-line basis over the term of the lease, resulting in an accrual, which is included in accounts payable, accrued expenses and other liabilities, for the amount by which the cumulative straight-line rent exceeds the contractual cash rent.
|
| Capital Leases |
CAPITAL LEASES
The
Golf business leases golf carts and other equipment that are classified as capital leases. The value of capital leases is recorded
as an asset on the balance sheet, along with a liability related to the associated payments. Amortization of capital lease assets
is calculated using the straight-line method over the shorter of the estimated useful lives and the initial lease terms. The cost
of equipment under capital leases is included in investments in other real estate in the consolidated balance sheets. Payments
under the lease are treated as reductions of the liability, with a portion being recorded as interest expense under the effective
interest method.
|
| Recent Accounting Pronouncements |
Recent
Accounting Pronouncements
In April 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. ASU 2014-08 changes the criteria for reporting a discontinued operation. Under the new pronouncement, a disposal of a part of an organization that has a major effect on its operations and financial results is a discontinued operation. This update is effective for Newcastle in the first quarter of 2015. Newcastle is currently evaluating the new guidance to determine the impact it may have to its consolidated financial statements.
In May 2014, the FASB and the International Accounting Standards Board ("IASB") issued ASU 2014-09 Revenues from Contracts with Customers (Topic 606). The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under today’s guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. The ASU is effective for Newcastle in the first quarter of 2017. Early application is not permitted. Entities have the option of using either a full retrospective or a modified approach to adopt the guidance in the ASU. Newcastle is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements.
In
June 2014, the FASB issued ASU No. 2014-11, Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures. The
standard changes the accounting for repurchase-to-maturity transactions and linked repurchase financing transactions to secured
borrowing accounting. The ASU also expands disclosure requirements related to certain transfers of financial assets that are accounted
for as sales and certain transfers accounted for as secured borrowings. The ASU is effective for Newcastle in the first quarter
of 2015. Early application is not permitted. Disclosures are not required for comparative periods presented before the effective
date. Newcastle is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements.
The FASB has recently issued or discussed a number of proposed standards on such topics as consolidation, financial statement presentation, leases, financial instruments and hedging. Some of the proposed changes are significant and could have a material impact on Newcastle’s reporting. Newcastle has not yet fully evaluated the potential impact of these proposals, but will make such an evaluation as the standards are finalized.
|