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 $14,080, and $2,610 from Merchandise Inventories, Net to Prepaid Expenses and Other Current Assets on the condensed consolidated balance sheets for the periods ended January 27, 2018 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						39 weeks ended
	January 26, 2019			January 27, 2018			January 26, 2019			January 27, 2018
BNC
Retail Product Sales	$	397,552		$	432,356		$	1,249,284		$	1,334,881
Rental Income	54,894			58,992			131,058			143,915
Service and Other Revenue ^(a)	8,621			9,540			28,770			29,370
BNC Total Sales	$	461,067		$	500,888		$	1,409,112		$	1,508,166
MBS
Retail Product Sales	$	38,285		$	45,128		$	159,180		$	177,126
Wholesale Product Sales	77,021			92,129			203,336			232,174
Rental Income	1,125			1,670			3,193			4,279
MBS Total Sales	$	116,431		$	138,927		$	365,709		$	413,579
DSS Sales ^(b)	$	5,237		$	5,572		$	15,848		$	10,058
Eliminations ^(c)	$	(32,405	)	$	(41,996	)	$	(88,089	)	$	(85,840	)
Total Sales	$	550,330		$	603,391		$	1,702,580		$	1,845,963


(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 January 26, 2019, January 7, 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 $69,662, $74,524, and $20,144 is recorded within Accrued Liabilities on our condensed consolidated balance sheets for the periods ended January 26, 2019, January 27, 2018 and April 28, 2018, respectively.

The following table presents changes in contract liabilities during the nine months ended January 26, 2019:



	39 weeks ended
	January 26, 2019
Deferred revenue at the beginning of period	$	20,144
Additions to deferred revenue during the period	189,832
Reductions to deferred revenue for revenue recognized during the period	(140,314		)
Deferred revenue balance at the end of period	$	69,662

As of January 26, 2019, we expect to recognize $69,546 of the deferred revenue balance within in the next 12 months.