Note 13 - Revenue Recognition
|3 Months Ended|
Sep. 30, 2018
|Notes to Financial Statements|
|Revenue from Contract with Customer [Text Block]||
We implemented ASU
Revenue from Contracts with Customers(Accounting Standards Codification Topic
606”), in the
firstquarter of fiscal
2019using the cumulative effect approach, which required us to apply the new guidance retrospectively to revenue transactions completed on or after
July 1, 2018.Adopting this new standard did
nothave a material impact on our consolidated financial statements but did result in enhanced presentation and disclosures.
Our revenue consists substantially of product sales. We report product sales net of discounts and recognize them at the point in time when control transfers to the customer. For sales to our customers in our wholesale segment, control typically transfers when the product is shipped. For sales in our retail segment, control generally transfers upon delivery to the customer.
Estimated refunds for returns and allowances are recorded using our historical return patterns. Under the new standard, we record estimated refunds for sales returns on a gross basis rather than on a net basis, and have recorded an asset for product we expect to receive from customers in “Prepaid expenses and other current assets”, and a corresponding refund liability in ”accrued expenses and other current liabilities” on the Consolidated Balance Sheets. At
September 30, 2018,these amounts were
In many cases we receive deposits from customers before we have transferred control of our product to our customers, resulting in contract liabilities. These contract liabilities (“Customer Deposits”) are reported as within current liabilities on our Consolidated Balance Sheet. At the beginning of fiscal
$61.2million of Customer Deposits. During the quarter ended
September 30, 2018,we recognized revenue of
$46.7million related to our Customer Deposits.
Upon adoption of ASC
606,we have elected the following accounting policies and practical expedients:
We recognize shipping and handling expense as fulfillment activities (rather than as a promised good or service) when the activities are performed even if those activities are performed after the control of the good has been transferred. Accordingly, we record the expenses for shipping and handling activities at the same time we recognize revenue.
We exclude from the measurement of the transaction price all taxes imposed on and concurrent with a specific revenue-producing transaction and collected by the entity from a customer, including sales, use, excise, value-added, and franchise taxes (collectively referred to as sales taxes).
notadjust revenue for the effects of financing components if the contract has a duration of
oneyear or less, as we believe that we will receive payment from the customer within
oneyear of when we transfer control of the related goods.
The following table disaggregates our revenue by product category by segment for the quarter
September 30, 2018:
Upholstery furniture includes fabric-covered items such as sleepers, recliners and other motion furniture, chairs, ottomans, custom pillows, sofas, loveseats, cut fabrics and leather.
Case goods furniture includes items such as beds, dressers, armoires, tables, chairs, buffets, entertainment units, home office furniture, and wooden accents.
Accents includes items such as window treatments and drapery hardware, wall décor, florals, lighting, clocks, mattresses, bedspreads, throws, pillows, decorative accents, area rugs, wall coverings and home and garden furnishings.
Other includes revenue for product delivery, the Ethan Allen Hotel room rentals and banquets,
third-party furniture protection plans, non-inventoried parts, and consulting and other fees, net of discounts, allowances and other sales incentives.
The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef