ANNUAL REPORT 2004 - Luxottica Group

customers take receipt of products and services.
Also included in retail division revenues are managed
vision care revenues consisting of (i) insurance
revenues which are recognized when earned over the
terms of the respective contractual relationships, and
(ii) administrative services revenues which are
recognized when services are provided during the
contract period. Accruals are established for amounts
due under these relationships determined to be
uncollectible.
Cole earns and accrues franchise revenues based on
sales by franchisees which are accrued as earned.
Initial franchise fees are recorded as revenue when all
material services or conditions relating to the sale of
In thousands of Euro
Beginning balance
Translation difference
Cole acquired balances
Warranty contracts sold
Other deferred revenues
Amortization of deferred revenues
Total
Current
Non-current
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
the franchise have been substantially performed or
satisfied by Cole and when the related store begins
operations. Accruals are established for amounts due
under these relationships determined to be
uncollectible.
The retail division also sells separately priced
extended warranty contracts with terms of coverage
of 12 to 24 months. Revenues from the sale of these
warranty contracts are deferred and amortized over
the lives of the contracts, while costs to service the
warranty claims are expensed as incurred.
A reconciliation of the changes in deferred revenue
from the sale of warranty contracts and other deferred
items is as follows:
2003
845
(120)
-
-
4,319
(4,532)
512
512
-
2004
512
(3,631)
44,161
10,152
3,922
(14,152)
40,964
31,948
9,016
105