Annual report pursuant to Section 13 and 15(d)

Revenue (Notes)

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Revenue (Notes)
 12 Months Ended
Dec. 31, 2020
Revenue [Abstract]  
Revenue from Contract with Customer [Text Block] Revenue
Disaggregated revenue by segment and product category consisted of the following:

Year ended December 31, 2020
(in millions) QxH QVC-International Total
Home $ 3,529  1,199  4,728 
Beauty 1,261  724  1,985 
Apparel 1,170  437  1,607 
Accessories 944  260  1,204 
Electronics 1,069  122  1,191 
Jewelry 363  216  579 
Other revenue 169  9  178 
Total net revenue $ 8,505  2,967  11,472 
Year ended December 31, 2019
(in millions) QxH QVC-International Total
Home $ 3,053  1,010  4,063 
Beauty 1,304  659  1,963 
Apparel 1,291  439  1,730 
Accessories 919  262  1,181 
Electronics 1,142  104  1,246 
Jewelry 402  221  623 
Other revenue 166  14  180 
Total net revenue $ 8,277  2,709  10,986 
Year ended December 31, 2018
(in millions) QxH QVC-International Total
Home $ 3,185  1,023  4,208 
Beauty 1,330  640  1,970 
Apparel 1,325  453  1,778 
Accessories 934  273  1,207 
Electronics 1,134  119  1,253 
Jewelry 474  213  687 
Other revenue 162  17  179 
Total net revenue $ 8,544  2,738  11,282 

Consumer Product Revenue and Other Revenue

QVC's revenue includes sales of consumer products in the following categories; home, beauty, apparel, accessories, electronics and jewelry, which are primarily sold through live merchandise-focused televised shopping programs and via our websites and other interactive media.

Other revenue consists primarily of income generated from our U.S. PLCC in which a large consumer financial services company provides revolving credit directly to QVC's customers for the sole purpose of purchasing merchandise or services with a PLCC. In return, the Company receives a portion of the net economics of the credit card program.
Revenue Recognition

On January 1, 2018, the Company adopted ASC 606, Revenue from Contracts with Customers, and all related amendments to all contracts using the modified retrospective method. The Company recognized the cumulative effect of initially applying the new revenue standard as an adjustment to retained earnings.

Revenue is recognized when obligations with the Company's customers are satisfied; generally this occurs at the time of shipment to its customers consistent with when control of the shipped product passes. The recognized revenue reflects the consideration the Company expects to receive in exchange for transferring goods, net of allowances for returns.

The Company generally recognizes revenue related to the PLCC over time as the PLCC is used by QVC's customers.

Sales, value add, use and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue.

The Company has elected to treat shipping and handling activities that occur after the customer obtains control of the goods as a fulfillment cost and not as a promised good or service. Accordingly, the Company accrues the related shipping costs and recognizes revenue upon delivery of the goods to the shipping carrier. In electing this accounting policy, all shipping and handling activities are treated as fulfillment costs.

The Company generally extends payment terms with its customers of one year or less and does not consider the time value of money when recognizing revenue.

Significant Judgments
Our products are generally sold with a right of return and we may provide other credits or incentives, which are accounted for as variable consideration when estimating the amount of revenue to recognize. Returns and credits are estimated at contract inception and updated at the end of each reporting period as additional information becomes available. The Company has determined that it is generally the principal in vendor arrangements as the Company can establish control over the goods prior to shipment. Accordingly, the Company records revenue for these arrangements on a gross basis.

The total reduction in net revenue due to returns for the years ended December 31, 2020, 2019 and 2018 aggregated to $1,976 million, $2,138 million and $2,213 million, respectively.
A summary of activity in the allowance for sales returns, recorded on a gross basis for the years ended December 31, 2020, 2019 and 2018 was as follows:
(in millions) Balance
beginning
of year		 Additions-
charged
to earnings		 Deductions Balance
end of
year
2020 $ 238  1,976  (1,947) 267 
2019 242  2,138  (2,142) 238 
2018 243  2,213  (2,214) 242