Quarterly report pursuant to Section 13 or 15(d)

Revenue Recognition

Revenue Recognition
3 Months Ended
Mar. 31, 2018
Revenue Recognition [Abstract]  
Revenue Recognition

2.    Revenue Recognition

Sales of VOIs -  Revenue is recognized for sales of VOIs after the legal rescission period has expired on a properly executed VOI sales agreement and the collectibility of the note receivable from the buyer, if any, is reasonably assured.  Transfer of control of the VOI to the buyer occurs at the point of sale after the legal rescission period has expired as the risk and rewards associated with VOI ownership are transferred to the buyer at this time.  Customer deposits from contracts within the legal rescission period are recorded in restricted cash and escrow deposits in the Company’s condensed consolidated statements of financial condition as such amounts are refundable until the legal rescission period has expired.  In cases where construction and development of Bluegreen’s developed resorts has not been substantially completed, Bluegreen defers all of the revenues and associated expenses for the sales of VOIs until construction is substantially complete and the resort may be occupied.

For financed contracts, Bluegreen has reduced the transaction price for expected loan losses which it considers to be variable consideration. To the extent Bluegreen determines that it is probable that a significant reversal of cumulative revenue recognized may occur, it records an estimate of variable consideration as a reduction to the transaction price of the sales of VOIs until the uncertainty associated with the variable consideration is resolved. Bluegreen’s estimates of the variable consideration are based on the results of its static pool analysis, which relies on historical payment data for similar VOI notes receivable and tracks uncollectibles for each period’s sales over the entire life of the notes. Bluegreen also considers whether historical economic conditions are comparable to then current economic conditions, as well as variations in underwriting standards. Bluegreen reviews its estimate of variable consideration on at least a quarterly basis. 

Under timeshare accounting rules, rental operations, including accommodations provided through the use of Bluegreen’s sampler program, are accounted for as incidental operations whereby incremental carrying costs in excess of incremental revenues are expensed as incurred. Conversely, incremental revenues in excess of incremental carrying costs are recorded as a reduction to the carrying cost of VOI inventory. Incremental carrying costs include costs that have been incurred by Bluegreen during the holding period of unsold VOIs, such as developer subsidies and maintenance fees on unsold VOI inventory. During each of the periods presented, Bluegreen’s aggregate rental revenue and sampler revenue was less than the aggregate carrying cost of its VOI inventory. Accordingly, Bluegreen recorded such revenue as a reduction to cost of other fee-based services in the Company’s condensed consolidated statements of operations and comprehensive income.

Fee-based sales commissions -  Revenue is recognized when a sales transaction with a VOI purchaser is consummated in accordance with the terms of the fee-based sales agreement with the third-party developer and the related consumer rescission period has expired.

Other fee-based services and cost reimbursements -  Revenue in connection with Bluegreen’s other fee-based services (which are described below) is recognized as follows:


Resort and club management revenue and related cost reimbursements are recognized as services are rendered.  These services provided to the resort homeowner associations (“HOAs”) are comprised of day-to-day services to operate the resort including management services and certain accounting and administrative functions.  Management services provided to the Vacation Club include managing the reservation system and providing owner, billing and collection services.  Bluegreen’s management contracts are typically structured as cost-plus, with an initial term of three years and automatic one-year renewals. Bluegreen believes these services to be a series of distinct goods and services to be accounted for as a single performance obligation over time and recognizes revenue as the customer receives the benefits of its services.  Bluegreen allocates variable consideration to the distinct good or service within the series, such that revenue from management fees and cost reimbursements is recognized in each period as the uncertainty with respect to such variable consideration is resolved.


Resort title fee revenue is recognized when escrow amounts are released and title documents are completed.


Rental revenues are recognized on a daily basis which is consistent with the period for which the customer benefits from such service. 


Mortgage servicing revenue is recognized over time as services are rendered. 

Bluegreen’s cost of other fee-based services consists of the costs associated with the various activities described above, as well as developer subsidies and maintenance fees on its unsold VOIs.

Trade sales Revenue is recognized on trade sales as follows:


Revenue is recognized on wholesale trade sales when control of the products is transferred to customers, which generally occurs when the products are shipped and the customers accept delivery.  Certain customer trade sale contracts have provisions for right of return, volume rebates, and price concessions. These types of discounts are accounted for as variable consideration, and the Company uses the expected value method with constraints to calculate the estimated reduction in the trade sales revenue.  The inputs used for the expected value method are historical experience with the customer, sales forecasts and outstanding purchase orders;


Revenue is recognized on retail trade sales at the point of sale, which occurs when products are sold at the Company’s retail locations.

Sales of real estate inventory - Revenue is generally recognized on sales of real estate inventory to customers when the sales are closed and title passes to the buyer.  Certain real estate sales contracts provide for a contingent purchase price which is accounted for as variable consideration. The Company estimates the amount of a portion of the variable consideration upon the closing of the real estate transaction based on an expected value methodology. The estimate of variable consideration is constrained to the extent that it is not probable that a significant revenue reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.  The inputs used in the expected value model are current sales prices net of incentives, historical contingent price consideration receipts and sales contracts on similar properties.

Interest income - Bluegreen provides financing for a significant portion of its owned VOI sales.  Bluegreen recognizes interest income from financing VOI sales on the accrual method as earned based on the outstanding principal balance, interest rate and terms stated in each individual financing agreement.  Bluegreen’s notes receivable are carried at amortized cost less an allowance for loan losses. Interest income is suspended, and previously accrued but unpaid interest income is reversed, on all delinquent notes receivable when principal or interest payments are more than 90 days contractually past due and is not resumed until such loans are less than 90 days past due. As of March 31, 2018 and December 31, 2017, $15.8 million and $12.9 million, respectively, of Bluegreen’s VOI notes receivable were more than 90 days past due, and accordingly, consistent with its policy, are not accruing interest income.  After 120 days, Bluegreen’s VOI notes receivable are generally written off against the allowance for loan losses.

Interest income from loans receivable originated by BBX Capital is recognized on accruing loans when management determines that it is probable that all of the principal and interest will be collected in accordance with the loan’s contractual terms.  Interest income is recognized on non-accrual loans on a cash basis. Loans receivable are included in other assets in the Company’s statement of financial condition.

Net gains on sales of assets –  Net gains on sales of assets represents sales of assets to non-customers.  Gains (or losses) are recognized from sales to non-customers when the control of the asset has been transferred to the buyer, which generally occurs when title passes to the buyer.

Other revenue – Other revenue  is  primarily rental income from properties under operating leases. Rental income is recognized as rents become due and rental payments received in advance are deferred until earned.

Disaggregated Revenue - Revenue disaggregated by category was as follows (in thousands):













For the Three Months Ended March 31,






Sales of VOIs






Fee-based sales commissions






Other fee-based services






Cost reimbursements






Resort title fees






Rental revenue






Trade sales - wholesale






Trade sales - retail






Sales of real estate inventory






Revenue from customers






Interest income






Net gains (losses) on sales of assets






Other revenue






Total revenues