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0 pointsTade09mo ago0 comments

How does Starbucks avoid the same with their vouchers?

0 comments

They hold 2 billion dollars worth of gift cards on the books.

They probably have a good model for what percentage of those will never be redeemed so they wouldn't have to count the whole $2 billion as a liability. The OP's one big customer would be harder to predict the future behavior of.

otterley9mo ago

That’s not how accounting works. There’s no such thing as a probabilistic liability.

jacquesm9mo ago

Let me introduce you to actuarial science:

https://en.wikipedia.org/wiki/Actuarial_science

1 more reply

foxglacier9mo ago

Yes there is. See provisions and contingent liabilities.

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j / k navigate · click thread line to collapse

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xeromal9mo ago

They hold 2 billion dollars worth of gift cards on the books.

foxglacier9mo ago

otterley9mo ago

That’s not how accounting works. There’s no such thing as a probabilistic liability.

jacquesm9mo ago

Let me introduce you to actuarial science:

https://en.wikipedia.org/wiki/Actuarial_science

1 more reply

foxglacier9mo ago

Yes there is. See provisions and contingent liabilities.

1 more reply

j / k navigate · click thread line to collapse