Analyzing Unearned Revenue Changes Electronic Arts Inc. (EA) is a developer, marketer, publisher and distributor of video game software and content to be played on a variety of platforms. There is an increasing demand for the ability to play these games in an online environment, and EA has developed this capability in many of its products. In addition, EA maintains servers (or arranges for servers) for the online activities of its customers. When customers purchase online subscriptions, revenue is recognized ratably over the subscription period.

EA treats a significant portion of its software sales as multiple-element arrangements andthrough fiscal 2007deferred a portion of customer purchases based on the estimated value of the online services offered. Beginning in fiscal 2008, it was not possible to estimate the separate value of the software and the online services, so EA began to defer all such revenue over a six-month period. Starting July 1, 2013, based on an analysis by the company, revenue continues to be recognized over six months for games distributed online, but for physical games purchased at retailers revenue will be recognized over a nine-month period. EAs 2014 10-K states that U.S. GAAP requires the company to account for the consumers right to receive unspecified updates or their matchmaking service for no additional fee as a bundled sale, or multiple-element arrangement. Information from Electronic Arts financial statements is given below. Prior to fiscal year 2006, no revenue was deferred. All amounts are in $millions.

Fiscal year end Mar. 31	Net revenue	Deferred net revenue (liability)
2005	$3,462	$0
2006	3,284	17
2007	3,424	40
2008	3,998	418
2009	4,545	292
2010	3,987	868
2011	3,922	1,107
2012	4,476	1,150
2013	4,130	1,146
2014	3,908	1,592

a. Calculate the growth rates in net revenue over the years in the table. Round answers to one decimal place. (Ex. 0.2345 = 23.5%). Use negative signs with answers, when appropriate.

Fiscal Year	Growth Rate
2006	Answer%
2007	Answer%
2008	Answer%
2009	Answer%
2010	Answer%
2011	Answer%
2012	Answer%
2013	Answer%
2014	Answer%

b. What are the purchases by customers in each of these years? What are the growth rates? Round answers to one decimal place. (Ex. 0.2345 = 23.5%). Use negative signs with answers, when appropriate.

Fiscal Year	Purchases	Growth Rate
2005	$Answer	n/a
2006	$Answer	Answer%
2007	$Answer	Answer%
2008	$Answer	Answer%
2009	$Answer	Answer%
2010	$Answer	Answer%
2011	$Answer	Answer%
2012	$Answer	Answer%
2013	$Answer	Answer%
2014	$Answer	Answer%