Many people can't get enough of Chipotle. It is just so good. However, not everyone is happy with them and what happened may leave you speechless!
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What Happened After Chipotle's Huge Promotion Is:
Chipotle wrote the SEC looking for a way to make it seem like spending $4 million on free burritos for customers was positive.
Chipotle's inqury to read:
“In light of the significant promotional activities begun in the first quarter of 2016, such as coupons issued for free products, please revise your revenue recognition policy to describe your accounting for such promotions and sales incentives.”
The SEC responded:
“The amount of the accrued liability for free food offers was approximately $4 million as of March 31, 2016. We do not recognize any revenue on free food coupons issued to or redeemed by customers.We will revise our accounting policy in future filings to describe our accounting for our promotions and sales incentives beginning with our next 10-Q filing, to include additional disclosures similar to the following: The Company recognizes revenue, net of discounts and incentives, when payment is tendered at the point of sale.”
Finished!
The way the SEC responded may make you see Chipotle's promotions in a completely different way- Do you still think the promotions were a good idea?
Let Us Know Your Thoughts!
Article Source: Food Beast
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