12. [Revenue and expense recognition: pricing season tickets - the Toronto Raptors, courtesy of Professor I. Krinsky]

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12. [Revenue and expense recognition: pricing season tickets - the Toronto Raptors, courtesy of Professor I. Krinsky] The Toronto Raptors, a 1995 NBA expansion team, announced an elaborate season-ticket plan with a ticket price and vantage point to satisfy almost every need. Ticket prices range from $85 per game for 45 games-plus a one-time license fee of $8,750-for the best seats, to $10 per game-plus a one-time license fee of $750 for the cheapest seats; the team has eight ticket prices. The license fee. used for the first time by a sports team in Canada, entitles the holder to a de facto lease on the seat. The li- cense holder retains the right to buy the accompanying ticket and may sell that right to anyone at a mutually agreed-on price.

a. Discuss how the Toronto Raptors should recognize revenue from ticket sales and the license fee under this system.

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The Analysis And Use Of Financial Statements

ISBN: 9780471375944

3rd Edition

Authors: Gerald I. White, Ashwinpaul C. Sondhi, Haim D. Fried

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