Revenue

9 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

Revenue

Note 3. Revenue

Our revenue from real estate is primarily rental income from residential and commercial property leases which is recorded when due from residents and is recognized monthly as earned. The revenue recognition rules under ASC 606 specifically exclude rental revenue from the accounting standard. The following table present our Hotel revenue disaggregated by revenue streams:

For the three months ended March 31,	2023		2022
Hotel revenues:
Hotel rooms	$	8,968,000	$	5,505,000
Food and beverage		744,000		372,000
Garage		609,000		677,000
Other operating departments		109,000		78,000
Total hotel revenues	$	10,430,000	$	6,632,000

THE INTERGROUP CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

For the nine months ended March 31,	2023		2022
Hotel revenues:
Hotel rooms	$	28,020,000	$	16,285,000
Food and beverage		1,905,000		934,000
Garage		2,148,000		2,352,000
Other operating departments		559,000		214,000
Total hotel revenues	$	32,632,000	$	19,785,000

Performance obligations

The Company identified the following performance obligations for which revenue is recognized as the respective performance obligations are satisfied, which results in recognizing the amount the Company expects to be entitled to for providing the goods or services:

● Cancelable room reservations or ancillary services are typically satisfied as the good or service is transferred to the hotel guest, which is generally when the room stay occurs.

● Non-cancelable room reservations and banquet or conference reservations represent a series of distinct goods or services provided over time and satisfied as each distinct good or service is provided, which is reflected by the duration of the room reservation.

● Other ancillary goods and services are purchased independently of the room reservation at standalone selling prices and are considered separate performance obligations, which are satisfied when the related good or service is provided to the hotel guest.

● Components of package reservations for which each component could be sold separately to other hotel guests are considered separate performance obligations and are satisfied as set forth above.

Hotel revenue primarily consists of hotel room rentals, revenue from accommodations sold in conjunction with other services (e.g., package reservations), food and beverage sales and other ancillary goods and services (e.g., parking). Revenue is recognized when rooms are occupied or goods and services have been delivered or rendered, respectively. Payment terms typically align with when the goods and services are provided. For package reservations, the transaction price is allocated to the performance obligations within the package based on the estimated standalone selling prices of each component.

The Company does not disclose the value of unsatisfied performance obligations for contracts with an expected length of one year or less. Due to the nature of our business, our revenue is not significantly impacted by refunds. Cash payments received in advance of guests staying at our hotel are refunded to hotel guests if the guest cancels within the specified time before any services are rendered. Refunds related to service are generally recognized as an adjustment to the transaction price at the time the hotel stay occurs or services are rendered.

Contract assets and liabilities

The Company does not have any material contract assets as of March 31, 2023 and June 30, 2022, other than trade and other receivables, net on our consolidated balance sheets. Our receivables are primarily the result of contracts with customers, which are reduced by an allowance for doubtful accounts that reflects our estimate of amounts that will not be collected.

The Company records contract liabilities when cash payments are received or due in advance of guests staying at the hotel, which are presented within accounts payable and other liabilities on our unaudited consolidated balance sheets and had a balance of $493,000 at July 1, 2022. During the nine months ended March 31, 2023, the entire $493,000 was recognized as revenue. Contract liabilities decreased to $364,000 as of March 31, 2023. The decrease at December 31, 2022 was primarily driven by advance deposits received from customers for services to be performed after March 31, 2023.

THE INTERGROUP CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Contract costs

The Company considers sales commissions earned to be incremental costs of obtaining a contract with our customers. As a practical expedient, the Company expenses these costs as incurred as our contracts with customers are less than one year.