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Revenues
 9 Months Ended
Jun. 30, 2019
Revenue from Contract with Customer [Abstract]  
Revenues
Note 2—Revenues
Impact of the New Revenue Standard
The following tables summarize the impact of the new revenue standard on the Company’s consolidated statement of operations for the three and nine months ended June 30, 2019 and the consolidated balance sheet as of June 30, 2019:
 
For the Three Months Ended
June 30, 2019
 
For the Nine Months Ended
June 30, 2019
 
As Reported
 
Impact of the New Revenue Standard
 
Results Under Prior Revenue Standard
 
As Reported
 
Impact of the New Revenue Standard
 
Results Under Prior Revenue Standard
 
(in millions)
Net revenues
$
5,840

 
$
(88
)
 
$
5,752

 
$
16,840

 
$
(179
)
 
$
16,661

 
 
 
 
 
 
 
 
 
 
 
 
Operating Expenses 
 
 
 
 
 
 
 
 
 
 
 
Marketing
282

 
(31
)
 
251

 
799

 
(100
)
 
699

Professional fees
113

 
(5
)
 
108

 
305

 
(12
)
 
293

General and administrative
315

 
(11
)
 
304

 
855

 
(21
)
 
834

Total operating expenses
1,932

 
(47
)
 
1,885

 
5,574

 
(133
)
 
5,441

Operating income
3,908

 
(41
)
 
3,867

 
11,266

 
(46
)
 
11,220

 
 
 
 
 
 
 
 
 
 
 
 
Income before income taxes
3,866

 
(41
)
 
3,825

 
11,173

 
(46
)
 
11,127

Income tax provision
765

 
(8
)
 
757

 
2,118

 
(6
)
 
2,112

Net income
3,101

 
(33
)
 
3,068

 
9,055

 
(40
)
 
9,015

 
June 30, 2019
 
As Reported
 
Impact of the New Revenue Standard
 
Results Under Prior Revenue Standard
 
(in millions)
Assets
 
 
 
 
 
Current portion of client incentives
$
690

 
$
(282
)
 
$
408

Client incentives
1,854

 
(811
)
 
1,043

Liabilities
 
 
 
 
 
Accounts payable
150

 
26

 
176

Client incentives
3,690

 
(439
)
 
3,251

Accrued liabilities
1,358

 
(18
)
 
1,340

Deferred tax liabilities
4,930

 
(112
)
 
4,818

Other liabilities
2,801

 
(110
)
 
2,691

Equity
 
 
 
 
 
Accumulated income
13,040

 
(440
)
 
12,600


Disaggregation of Revenues
The nature, amount, timing and uncertainty of the Company’s revenues and cash flows and how they are affected by economic factors are most appropriately depicted through the Company’s revenue categories and geographical markets. The following tables disaggregate the Company’s net revenues by revenue category and by geography for the three and nine months ended June 30, 2019 and 2018:
 
Three Months Ended
June 30,
 
Nine Months Ended
June 30,
 
2019
 
2018
 
2019
 
2018
 
(in millions)
Service revenues
$
2,405

 
$
2,196

 
$
7,164

 
$
6,595

Data processing revenues
2,662

 
2,359

 
7,564

 
6,633

International transaction revenues
1,977

 
1,830

 
5,624

 
5,248

Other revenues
342

 
229

 
968

 
688

Client incentives
(1,546
)
 
(1,374
)
 
(4,480
)
 
(3,989
)
Net revenues
$
5,840

 
$
5,240

 
$
16,840

 
$
15,175

 
Three Months Ended
June 30,
 
Nine Months Ended
June 30,
 
2019
 
2018
 
2019
 
2018
 
(in millions)
U.S.
$
2,587

 
$
2,334

 
$
7,573

 
$
6,896

International
3,253

 
2,906

 
9,267

 
8,279

Net revenues
$
5,840

 
$
5,240

 
$
16,840

 
$
15,175


Revenue recognition. The Company's net revenues are comprised principally of the following categories: service revenues, data processing revenues, international transaction revenues, and other revenues, reduced by costs incurred under client incentives arrangements. As a payment network service provider, the Company’s obligation to the customer is to stand ready to provide continuous access to our payment network over the contractual term. Consideration is variable based primarily upon the amount and type of transactions and payments volume on Visa’s products. The Company recognizes revenues, net of sales and other similar taxes, as the payment network services are performed. Fixed fees for payment network services are generally recognized ratably over the related service period. The Company has elected the optional exemption to not disclose the remaining performance obligations related to payment network services.
Service revenues consist of revenues earned for services provided in support of client usage of Visa products. Current quarter service revenues are primarily assessed using a calculation of current pricing applied to the prior quarter's payments volume. The Company also earns revenues from assessments designed to support ongoing acceptance and volume growth initiatives, which are recognized in the same period the related volume is transacted.
Data processing revenues consist of revenues earned for authorization, clearing, settlement, network access and other maintenance and support services that facilitate transaction and information processing among the Company's clients globally. Data processing revenues are recognized in the same period the related transactions occur or services are performed.
International transaction revenues are earned for cross-border transaction processing and currency conversion activities. Cross-border transactions arise when the country of origin of the issuer is different from that of the merchant. International transaction revenues are primarily generated by cross-border payments and cash volume.
Other revenues consist mainly of license fees for use of the Visa brand, fees for account holder services, licensing and certification and other activities related to the Company's acquired entities. Other revenues also include optional services or product enhancements, such as extended account holder protection and concierge services. Other revenues are recognized in the same period the related transactions occur or services are performed.
Client incentives. The Company enters into long-term contracts with financial institution clients, merchants and strategic partners for various programs designed to increase revenues recognized by growing payments volume, increasing Visa product acceptance, winning merchant routing transactions over to Visa's network and driving innovation. These incentives are primarily accounted for as reductions to revenues or as operating expenses if the payment is in exchange for a distinct good or service provided by the customer. The Company generally capitalizes upfront and fixed incentive payments under these agreements and amortizes the amounts as a reduction to revenues ratably over the contractual term. Incentives that are earned by the customer based on performance targets are recorded as reductions to revenues based on management's estimate of each client's future performance. These accruals are regularly reviewed and estimates of performance are adjusted, as appropriate, based on changes in performance expectations, actual client performance, amendments to existing contracts or the execution of new contracts.