Following Information was obtained from the Notes to Consolidated Financial Statements.
Streaming Content: Netflix licenses and acquires rights to stream the TV shows, movies and other original content to its members for unlimited viewing. These rights are acquired for a fixed fee and specific time of availability. Payment terms for these content licenses require more cash up front. The company capitalizes the fee per title and records a liability at the gross amount of liabilities when the license period begins, the cost of title is known and the title is available for online streaming. The company divides the content available for streaming in two portions; Current content library is the portion available for streaming within one year and the remaining as Non Current Content library.
The procurement of streaming content rights and changes in related liabilities, are classified within cash used for operating activities on the Statement of Cash Flows. Netflix amortizes the content …show more content…
ASU 2014-09 establishes principles for recognizing revenue upon the transfer of promised goods or services to customers, in an amount that reflects the expected consideration to be received in exchange for those goods or services. It is effective for annual reporting periods beginning after December 15, 2016. Early adoption is not permitted. The amendments may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of initial application. The Company is currently in the process of evaluating the impact of adoption of the ASU on its consolidated financial statements, but does not expect the impact to be