Note 5. Revenue

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). The standard provides companies with a single model for use in accounting for revenue arising from contracts with customers and supersedes current revenue recognition guidance, including industry-specific revenue guidance. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. New disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers are also required.

We have analyzed the impacts of the guidance across all of our revenue streams and have adopted the standard using the modified retrospective method effective with the first quarter of Fiscal 2019. Financial results for reporting periods beginning after April 28, 2018 are presented in accordance with Topic 606, while comparative period information continues to reflect our historic accounting under the accounting standards in effect for those periods. There was no cumulative change to retained earnings as a result of adopting the guidance. Along with the additional disclosure requirements required by the new standard, we reclassified the product return asset of $8,846, and $2,610 from Merchandise Inventories, Net to Prepaid Expenses and Other Current Assets on the condensed consolidated balance sheets for the periods ended October 28, 2017 and April 28, 2018, respectively.

See Note 2. Summary of Significant Accounting Pronouncements for additional information related to our revenue recognition policies and Note 6. Segment Reporting for a description of each segments product and service offerings.

Disaggregation of Revenue

The following table disaggregates the revenue associated with our major product and service offerings.



	13 weeks ended						26 weeks ended
	October 27, 2018			October 28, 2017			October 27, 2018			October 28, 2017
BNC
Retail Product Sales	$	634,587		$	681,461		$	851,733		$	902,525
Rental Income	57,331			64,956			76,164			84,923
Service and Other Revenue ^(a)	10,952			10,884			20,148			19,830
BNC Total Sales	$	702,870		$	757,301		$	948,045		$	1,007,278
MBS
Retail Product Sales	$	79,785		$	85,491		$	120,894		$	131,998
Wholesale Product Sales	37,907			47,526			126,316			140,045
Rental Income	1,262			1,834			2,068			2,609
MBS Total Sales	$	118,954		$	134,851		$	249,278		$	274,652
DSS Sales ^(b)	$	4,934		$	4,486		$	10,611		$	4,486
Eliminations ^(c)	$	(11,992	)	$	(9,777	)	$	(55,684	)	$	(43,844	)
Total Sales	$	814,766		$	886,861		$	1,152,250		$	1,242,572


(a)	Service and other revenue primarily relates to brand partnerships and other service revenues.


(b)	DSS sales primarily relate to direct-to-student subscription-based revenue.


(c)	The sales eliminations represent the elimination of MBS sales to BNC and the elimination of BNC commissions earned from MBS.

Contract Assets and Contract Liabilities

Contract assets represent the sale of goods or services to a customer before we have the right to obtain consideration from the customer. Contract assets consist of unbilled amounts at the reporting date and are transferred to accounts receivable when the rights become unconditional. Contract assets (Unbilled Receivables) were $0 as of both October 27, 2018 and April 28, 2018 on our condensed consolidated balance sheets.

Contract liabilities represent an obligation to transfer goods or services to a customer for which we have received consideration and consists of our deferred revenue liability (Deferred Revenue). Deferred revenue primarily consists of advanced payments from customers related to textbook rental and subscription-based performance obligations that have not yet been satisfied, as well as unsatisfied performance obligations associated with partnership marketing services. Deferred revenue is recognized ratably over the terms of the related rental or subscription periods, or when the contracted services are provided to our partnership marketing customers. Deferred revenue of $51,126, $56,269, and $20,144 is recorded within Accrued Liabilities on our condensed consolidated balance sheets for the periods ended October 27, 2018, October 28, 2017 and April 28, 2018, respectively.

The following table presents changes in contract liabilities during the six months ended October 27, 2018:



	26 weeks ended
	October 27, 2018
Deferred revenue at the beginning of period	$	20,144
Additions to deferred revenue during the period	116,649
Reductions to deferred revenue for revenue recognized during the period	(85,667		)
Deferred revenue balance at the end of period	$	51,126

As of October 27, 2018, we expect to recognize $50,894 of the deferred revenue balance within in the next 12 months.