General Mills (GIS)

Promotional Expenditures Our promotional activities are conducted through our customers and directly or indirectly with end consumers. These activities include: payments to customers to perform merchandising activities on our behalf, such as advertising or in-store displays; discounts to our list prices to lower retail shelf prices and payments to gain distribution of new products; coupons, contests, and other incentives; and media and advertising expenditures. The media and advertising expenditures are recognized as expense when the advertisement airs. The cost of payments to customers and other consumer activities are recognized as the related revenue is recorded, which generally precedes the actual cash expenditure. The recognition of these costs requires estimation of customer participation and performance levels. These estimates are made based on the forecasted customer sales, the timing and forecasted costs of promotional activities, and other factors. Differences between estimated expenses and actual costs are normally insignificant and are recognized as a change in management estimate in a subsequent period. Our accrued trade, coupon, and consumer marketing liabilities were $446.0 million as of May 25, 2008, and $410.1 million as of May 27, 2007. Because our total promotional expenditures (including amounts classified as a reduction of revenues) are significant, if our estimates are inaccurate we would have to make adjustments that could have a material effect on our results of operations.

Promotional
Expenditures Our promotional activities are
conducted through our customers and directly or indirectly with
end consumers. These activities include: payments to customers
to perform merchandising activities on our behalf, such as
advertising or in-store displays; discounts to our list prices
to lower retail shelf prices and payments to gain distribution
of new products; coupons, contests, and other incentives; and
media and advertising expenditures. The media and advertising
expenditures are recognized as expense when the advertisement
airs. The cost of payments to customers and other consumer
activities are recognized as the related revenue is recorded,
which generally precedes the actual cash expenditure. The
recognition of these costs requires estimation of customer
participation and performance levels. These estimates are made
based on the forecasted customer sales, the timing and
forecasted costs of promotional activities, and other factors.
Differences between estimated expenses and actual costs are
normally insignificant and are recognized as a change in
management estimate in a subsequent period. Our accrued trade,
coupon, and consumer marketing liabilities were
$446.0 million as of May 25, 2008, and
$410.1 million as of May 27, 2007. Because our total
promotional expenditures (including amounts classified as a
reduction of revenues) are significant, if our estimates are
inaccurate we would have to make adjustments that could have a
material effect on our results of operations.