How does The Standardx ensure compliance with accounting standards related to revenue recognition?

Revenue Recognition—Our revenues are primarily derived from the products and services provided to our customers and are generally recognized when control of the product or service has transferred to the customer. Our customers primarily include third-party owners and franchisees, guests at owned and leased hotels, customers that use our distribution services through ALG Vacations and Mr & Mrs Smith, a third-party partner through our co-branded credit card programs, and owners and guests of residential and vacation units. A summary of our revenue streams is as follows:

• Gross fees—Gross fees include base management fees, incentive management fees, and franchise and other fees.

For each performance obligation satisfied over time, we recognize revenues using an output method based on the value transferred to the customer. Revenues are recognized based on the transaction price and the observable outputs related to each performance obligation. We deem the following to represent our progress in satisfying these performance obligations:

• revenues and operating profits earned by the hotels during the reporting period for access to Hyatt's IP as it is indicative of the value third-party owners and franchisees derive;
• revenues and operating profits of the hotels for the promise to provide services to the hotels under management and hotel services agreements;
• award night redemptions or point redemptions with third-party partners for the administration of the loyalty program performance obligation; and
• cardholder spend for the license to the Hyatt name through our co-branded credit card programs as it is indicative of the value our partner derives from the use of our name.

Within our management and hotel services agreements, we have two performance obligations: providing access to Hyatt's IP and providing management and hotel services. Although these constitute two separate performance obligations, both obligations represent services that are satisfied over time, and we recognize revenues using an output method based on the performance of the hotel. Therefore, we have not allocated the transaction price between these two performance obligations as the allocation would result in the same pattern of revenue recognition.

Revenues are adjusted for the effects of a significant financing component when the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year.

We have applied the practical expedient that permits the omission of prior-period information about revenues allocated to future performance obligations, and we do not estimate revenues allocated to remaining performance obligations for the following:

• • deferred revenue related to the loyalty program, base management fees, and incentive management fees as the revenues are allocated to a wholly unperformed performance obligation in a series;
• revenues related to royalty fees as they are considered sales-based royalty fees;
• revenues received for free nights granted through our co-branded credit card programs as the awards have an original duration of 12 months;
• revenues related to advanced bookings at owned and leased hotels as each stay has a duration of 12 months or less; and
• revenues related to ALG Vacations and Mr & Mrs Smith distribution services as bookings are generally for travel within 12 months or less.

Source: Item 23 — Receipts (FDD pages 85–132)