|
GENERAL (Policies)
|
9 Months Ended |
|---|---|
|
Sep. 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 certain 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 raises the threshold
for disposals to qualify as discontinued operations. A discontinued
operation is defined as: (1) a component of an entity or group of components that has been disposed of or classified as held for
sale and represents a strategic shift that has or will have a major effect on an entity’s operations and financial results;
or (2) an acquired business that is classified as held for sale on the acquisition date. ASU 2014-08 also requires additional
disclosures regarding discontinued operations, as well as material disposals that do not meet the definition of discontinued operations.
The application of this guidance is prospective from the date of adoption and applies only to disposals (or new classifications
to held for sale) that have not been reported as discontinued operations in Newcastle's previously issued financial statements.
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 Revenue
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, Transfers and Servicing (Topic 860): 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 that are economically similar to repurchase agreements
and the types of collateral pledged in repurchase agreements and similar transactions accounted for as a secured borrowing. 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.
In
August 2014, the FASB issued ASU 2014-13, Consolidation (Topic 810): Measuring the Financial Assets and the Financial Liabilities
of a Consolidated Collateralized Financing Entity (“CFE”). The standard allows a reporting entity that consolidates
a CFE, to elect to measure the financial assets and the financial liabilities of that CFE using the measurement alternative. Under
the measurement alternative, the reporting entity should measure both the financial assets and the financial liabilities of that
CFE in its consolidated financial statements using the more observable of the fair value of the financial assets and the fair value
of the financial liabilities. This guidance is effective for Newcastle in the first quarter of 2016. An entity can elect either
a retrospective or modified retrospective transition method, and early adoption is permitted as of the beginning of an annual
period. Newcastle is currently evaluating the new guidance to determine the impact it may have to 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.
|