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Model 3 FSD Conspiracy Theory

Discussion in 'Autopilot & Autonomous/FSD' started by MXWing, Aug 18, 2019.

  1. TIppy

    TIppy Active Member

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    Yes, but it also mentions this.

    unless other payment terms were explicitly stated in a signed contract.

    So the contract can modify the standard treatment.
     
  2. Daniel in SD

    Daniel in SD Active Member

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    Yeah, if the contract says they don't have to deliver FSD and you're paying for nothing then Tesla could book the revenue.
     
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  3. TIppy

    TIppy Active Member

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    That would be one scenario, and seems to be the likely outcome.
     
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  4. TIppy

    TIppy Active Member

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    #84 TIppy, Aug 24, 2019
    Last edited: Aug 24, 2019
    I did.

    I found the language in the section Automotive Sales with Resale Value Guarantee interesting. While they would normally have to defer the revenue associated with the resale value guarantee, they instead recognize it at delivery because they say the resale guarantee they offer is so ridiculously low that it is unlikely that anyone would exercise it.

    And here is the language I found for fsd:

    Revenue related to Autopilot and full self-driving features is recognized when functionality is delivered to the customer.

    I don't see the word deferred explicitly stated here. One might infer that it's deferred, but one could also take this to mean they book it either when it is delivered with the car or when they add it post sale, thereby making it clear that revenue isn't deferred. I would think they would have used "as functionality" if they meant over time.
     
  5. EVNow

    EVNow Well-Known Member

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    You are trying very hard to not understand. Page 15 of the rtf version of Q2 '19 10Q.

    Automotive sales revenue includes revenues related to deliveries of new vehicles, and specific other features and services that meet the definition of a performance obligation include access to our Supercharger network, internet connectivity, Autopilot and Full Self-Driving (“FSD”) features and over-the-air software updates. Deferred revenue related to the access to our Supercharger network, internet connectivity, Autopilot and FSD features and over-the-air software updates on automotive sales with and without resale value guarantee amounted to $1.19 billion and $882.8 million as of June 30, 2019 and December 31, 2018, respectively. Deferred revenue is equivalent to the total transaction price allocated to the performance obligations that are unsatisfied, or partially unsatisfied, as of the balance sheet date. Revenue recognized from the deferred revenue balance as of December 31, 2018 was $113.5 million for the six months ended June 30, 2019 . From the deferred revenue balance as of January 1, 2018, revenue recognized during the six months ended June 30, 2018 was $44.5 million. Of the total deferred revenue on automotive sales with and without resale value guarantees, we expect to recognize $567.0 million of revenue in the next 12 months. The remaining balance will be recognized over the various performance periods of the obligations, which is up to the eight-year life of the vehicle.​
     
  6. TIppy

    TIppy Active Member

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    #86 TIppy, Aug 24, 2019
    Last edited: Aug 24, 2019
    But the 10Q does make it clear that not everything that would normally be deferred is, if you can make an argument that the revenue is unlikely to be returned.

    I agree it's looking pretty bad for me as far as deferred FSD revenue is concerned. I have already agreed earlier that the FSD fee could be treated as a non-refundable deposit. Still, it doesn't break down how much deferred revenue, if any, is attributed to FSD. If you take my interpretation of when FSD revenue is recognized from my previous post, it could be that they didn't defer any. They mention autopilot in the list of what might be deferred, but what hasn't been delivered for autopilot?

    Thanks for taking a breath to condescendingly reply to my post.
     
  7. KG M3

    KG M3 Member

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    Dude, I have to admire your patience and persistence in trying to explain US GAAP to someone who has never worked with it before. I would have understood you giving up a page or two ago when you mentioned that you were out. You have maintained a factual approach and an even tone here, even when others have not. Good job.
     
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  8. TIppy

    TIppy Active Member

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    #88 TIppy, Aug 24, 2019
    Last edited: Aug 24, 2019
    It's not the concept of deferred revenue, per se, that I'm talking about. EVNow obtusely refuses to understand that there can be mitigating facts that can affect when revenue that is usually deferred, isn't. He's been totally missing my point and just keeps harping on "goods not delivered". It's not the fact that goods haven't been delivered, but that if you don't deliver them you will have to return the money. It's the prospect of having to return the money that requires deferring the income. This is what I've been trying to get across.
     

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