GENZ » Topics » Distributor Fees

This excerpt taken from the GENZ 10-K filed Mar 1, 2010.

Distributor Fees

        Cash consideration (including a sales incentive) given by a vendor to a customer is presumed to be a reduction of the selling prices of the vendor's products or services and, therefore, is appropriately characterized as a reduction of revenue. We include such fees in contractual adjustments, which are recorded as a reduction to product sales. That presumption is overcome and the consideration is

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appropriately be characterized as a cost incurred if, and to the extent that, both of the following conditions are met:

    the vendor receives, or will receive, an identifiable benefit (goods or services) in exchange for the consideration; and

    the vendor can reasonably estimate the fair value of the benefit received.

        We record service fees paid to our distributors as a charge to SG&A, a component of operating expenses, only if the criteria set forth above are met. The following table sets forth the distributor fees recorded as a reduction to product sales and charged to SG&A (amounts in thousands):

 
  Year Ended December 31,    
  09/08
Increase/
(Decrease)
% Change
   
  08/07
Increase/
(Decrease)
% Change
 
 
  09/08
Increase/
(Decrease)
  08/07
Increase/
(Decrease)
 
 
  2009   2008   2007  

Distributor fees:

                                           
 

Included in contractual adjustments and recorded as a reduction to product sales

  $ 22,308   $ 23,368   $ 18,483   $ (1,060 )   (5 )% $ 4,885     26 %
 

Charged to SG&A

    13,350     13,514     13,190     (164 )   (1 )%   324     2 %
                                   
   

Total distributor fees

  $ 35,658   $ 36,882   $ 31,673   $ (1,224 )   (3 )% $ 5,209     16 %
                                   
This excerpt taken from the GENZ 10-Q filed May 11, 2009.

Distributor Fees

        EITF 01-9, "Accounting for Consideration given by a Vendor to a Customer (including a Reseller of a Vendor's Products)" specifies that cash consideration (including a sales incentive) given by a vendor to a customer is presumed to be a reduction of the selling prices of the vendor's products or services and, therefore, should be characterized as a reduction of revenue. We include such fees in contractual adjustments, which are recorded as a reduction to product sales. That presumption is overcome and the consideration should be characterized as a cost incurred if, and to the extent that, both of the following conditions are met:

    the vendor receives, or will receive, an identifiable benefit (goods or services) in exchange for the consideration; and

    the vendor can reasonably estimate the fair value of the benefit received.

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        We record service fees paid to our distributors as a charge to SG&A, a component of operating expenses, only if the criteria set forth above are met. The following table sets forth the distributor fees recorded as a reduction to product sales and charged to SG&A (amounts in thousands):

 
  Three Months Ended
March 31,
 
 
  2009   2008  

Distributor fees:

             
 

Included in contractual adjustments and recorded as a reduction to product sales

  $ 3,479   $ 4,696  
 

Charged to SG&A

    3,547     2,951  
           
   

Total distributor fees

  $ 7,026   $ 7,647  
           
These excerpts taken from the GENZ 10-K filed Mar 2, 2009.

Distributor Fees

        EITF Issue No. 01-9, "Accounting for Consideration given by a Vendor to a Customer (including a Reseller of a Vendor's Products)" specifies that cash consideration (including a sales incentive) given by a vendor to a customer is presumed to be a reduction of the selling prices of the vendor's products or services and, therefore, should be characterized as a reduction of revenue. We include such fees in contractual adjustments, which are recorded as a reduction to product sales. That presumption is overcome and the consideration should be characterized as a cost incurred if, and to the extent that, both of the following conditions are met:

    the vendor receives, or will receive, an identifiable benefit (goods or services) in exchange for the consideration; and

    the vendor can reasonably estimate the fair value of the benefit received.

        We record service fees paid to our distributors as a charge to SG&A, a component of operating expenses, only if the criteria set forth above are met. The following table sets forth the distributor fees recorded as a reduction to product sales and charged to SG&A (amounts in thousands):

 
  Year Ended December 31,  
 
  2008   2007   2006  

Distributor fees:

                   
 

Included in contractual adjustments and recorded as a reduction to product sales

  $ 13,502   $ 12,445   $ 8,956  
 

Charged to SG&A

    13,514     13,190     10,550  
               
   

Total distributor fees

  $ 27,016   $ 25,635   $ 19,506  
               

Distributor Fees



        EITF Issue No. 01-9, "Accounting for Consideration given by a Vendor to a Customer (including a Reseller of a
Vendor's Products)" specifies that cash consideration (including a sales incentive) given by a vendor to a customer is presumed to be a reduction of the selling prices of the vendor's products or
services and, therefore, should be characterized as a reduction of revenue. We include such fees in contractual adjustments, which are recorded as a reduction to product sales. That presumption is
overcome and the consideration should be characterized as a cost incurred if, and to the extent that, both of the following conditions are met:





    the vendor receives, or will receive, an identifiable benefit (goods or services) in exchange for the consideration; and


    the vendor can reasonably estimate the fair value of the benefit received.



        We
record service fees paid to our distributors as a charge to SG&A, a component of operating expenses, only if the criteria set forth above are met. The following table sets forth the
distributor fees recorded as a reduction to product sales and charged to SG&A (amounts in thousands):

















































































































 
 Year Ended December 31,  
 
 2008  2007  2006  

Distributor fees:

          
 

Included in contractual adjustments and recorded as a reduction to product sales

 $13,502 $12,445 $8,956 
 

Charged to SG&A

  13,514  13,190  10,550 
        
  

Total distributor fees

 $27,016 $25,635 $19,506 
        




This excerpt taken from the GENZ 10-Q filed Nov 7, 2008.

Distributor Fees

        EITF Issue No. 01-9, "Accounting for Consideration given by a Vendor to a Customer (including a Reseller of a Vendor's Products)" specifies that cash consideration (including a sales incentive) given by a vendor to a customer is presumed to be a reduction of the selling prices of the vendor's products or services and, therefore, should be characterized as a reduction of revenue. We include such fees in contractual adjustments, which are recorded as a reduction to product sales. That presumption is overcome and the consideration should be characterized as a cost incurred if, and to the extent that, both of the following conditions are met:

    the vendor receives, or will receive, an identifiable benefit (goods or services) in exchange for the consideration; and

    the vendor can reasonably estimate the fair value of the benefit received.

        We record fees paid to our distributors for services as a charge to SG&A, a component of operating expenses, only if the criteria set forth above are met. The following table sets forth the distributor fees recorded as a reduction to product sales and charged to SG&A (amounts in thousands):

 
  Three Months Ended
September 30,
  Nine Months Ended
September 30,
 
 
  2008   2007   2008   2007  

Distributor fees:

                         
 

Included in contractual adjustments and recorded as a reduction to product sales

  $ 3,437   $ 2,948   $ 9,723   $ 9,238  
 

Charged to SG&A

    3,519     3,210     10,039     9,644  
                   
   

Total distributor fees

  $ 6,956   $ 6,158   $ 19,762   $ 18,882  
                   
This excerpt taken from the GENZ 10-Q filed Aug 11, 2008.

Distributor Fees

        EITF Issue No. 01-9, "Accounting for Consideration given by a Vendor to a Customer (including a Reseller of a Vendor's Products)" specifies that cash consideration (including a sales incentive) given by a vendor to a customer is presumed to be a reduction of the selling prices of the vendor's products or services and, therefore, should be characterized as a reduction of revenue. We include such fees in contractual adjustments, which are recorded as a reduction to product sales. That presumption is overcome and the consideration should be characterized as a cost incurred if, and to the extent that, both of the following conditions are met:

    the vendor receives, or will receive, an identifiable benefit (goods or services) in exchange for the consideration; and

    the vendor can reasonably estimate the fair value of the benefit received.

        We record fees paid to our distributors for services as a charge to SG&A, a component of operating expenses, only if the criteria set forth above are met. The following table sets forth the

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Table of Contents


distributor fees recorded as a reduction to product sales and charged to SG&A (amounts in thousands):

 
  Three Months Ended
June 30,
  Six Months Ended
June 30,
 
 
  2008   2007   2008   2007  

Distributor fees:

                         
 

Included in contractual adjustments and recorded as a reduction to product sales

  $ 1,611   $ 3,198   $ 6,019   $ 6,290  
 

Charged to SG&A

    3,569     3,458     6,520     6,434  
                   
   

Total distributor fees

  $ 5,180   $ 6,656   $ 12,539   $ 12,724  
                   

        Total distributor fees decreased $1.5 million for the three months ended June 30, 2008, as compared to the same period of 2007, primarily due to decreased estimates for distributor fees for our Renal segment.

This excerpt taken from the GENZ 10-Q filed May 9, 2008.

Distributor Fees

        EITF Issue No. 01-9, "Accounting for Consideration given by a Vendor to a Customer (including a Reseller of a Vendor's Products)" specifies that cash consideration (including a sales incentive) given by a vendor to a customer is presumed to be a reduction of the selling prices of the vendor's products or services and, therefore, should be characterized as a reduction of revenue. We include such fees in contractual adjustments, which are recorded as a reduction to product sales. That presumption is overcome and the consideration should be characterized as a cost incurred if, and to the extent that, both of the following conditions are met:

    the vendor receives, or will receive, an identifiable benefit (goods or services) in exchange for the consideration; and

    the vendor can reasonably estimate the fair value of the benefit received.

        We record fees paid to our distributors for services as a charge to SG&A, a component of operating expenses, only if the criteria set forth above are met. The following table sets forth the

32



distributor fees recorded as a reduction to product sales and charged to SG&A (amounts in thousands):

 
  Three Months Ended
March 31,

 
  2008
  2007
Distributor fees:            
  Included in contractual adjustments and recorded as a reduction to product sales   $ 4,408   $ 3,092
  Charged to SG&A     2,951     2,976
   
 
    Total distributor fees   $ 7,359   $ 6,068
   
 
These excerpts taken from the GENZ 10-K filed Feb 29, 2008.

Distributor Fees

        EITF Issue No. 01-9, "Accounting for Consideration given by a Vendor to a Customer (including a Reseller of a Vendor's Products)" specifies that cash consideration (including a sales incentive) given by a vendor to a customer is presumed to be a reduction of the selling prices of the vendor's products or services and, therefore, should be characterized as a reduction of revenue. We include such fees in contractual adjustments, which are recorded as a reduction to product sales. That presumption is overcome and the consideration should be characterized as a cost incurred if, and to the extent that, both of the following conditions are met:

    the vendor receives, or will receive, an identifiable benefit (goods or services) in exchange for the consideration; and

    the vendor can reasonably estimate the fair value of the benefit received.

F-11


        We record service fees paid to our distributors as a charge to SG&A, a component of operating expenses, only if the criteria set forth above are met. The following table sets forth the distributor fees recorded as a reduction to product sales and charged to SG&A:

 
  Year Ended December 31,
 
  2007
  2006
  2005
 
  (Amounts in thousands)

Distributor fees:                  
  Included in contractual adjustments and recorded as a reduction to product sales   $ 12,445   $ 8,956   $ 325
  Charged to SG&A     13,190     10,550     14,504
   
 
 
    Total distributor fees   $ 25,635   $ 19,506   $ 14,829
   
 
 

Distributor Fees



        EITF Issue No. 01-9, "Accounting for Consideration given by a Vendor to a Customer (including a Reseller of a Vendor's Products)" specifies
that cash consideration (including a sales incentive) given by a vendor to a customer is presumed to be a reduction of the selling prices of the vendor's products or services and, therefore, should be
characterized as a reduction of revenue. We include such fees in contractual adjustments, which are recorded as a reduction to product sales. That presumption is overcome and the consideration should
be characterized as a cost incurred if, and to the extent that, both of the following conditions are met:





    the
    vendor receives, or will receive, an identifiable benefit (goods or services) in exchange for the consideration; and


    the
    vendor can reasonably estimate the fair value of the benefit received.


F-11













        We
record service fees paid to our distributors as a charge to SG&A, a component of operating expenses, only if the criteria set forth above are met. The following table sets forth the
distributor fees recorded as a reduction to product sales and charged to SG&A:






























































































 
 Year Ended December 31,
 
 2007
 2006
 2005
 
 (Amounts in thousands)

Distributor fees:         
 Included in contractual adjustments and recorded as a reduction to product sales $12,445 $8,956 $325
 Charged to SG&A  13,190  10,550  14,504
  
 
 
  Total distributor fees $25,635 $19,506 $14,829
  
 
 




This excerpt taken from the GENZ 10-Q filed Nov 8, 2007.

Distributor Fees

        EITF Issue No. 01-09, "Accounting for Consideration given by a Vendor to a Customer (including a Reseller of a Vendor's Products)" specifies that cash consideration (including a sales incentive) given by a vendor to a customer is presumed to be a reduction of the selling prices of the vendor's products or services and, therefore, should be characterized as a reduction of revenue. We include such fees in contractual adjustments, which are recorded as a reduction to product sales. That presumption is overcome and the consideration should be characterized as a cost incurred if, and to the extent that, both of the following conditions are met:

    the vendor receives, or will receive, an identifiable benefit (goods or services) in exchange for the consideration; and

    the vendor can reasonably estimate the fair value of the benefit received.

        We record service fees paid to our distributors as a charge to SG&A, a component of operating expenses, only if the criteria set forth above are met. The following table sets forth the distributor fees recorded as a reduction to product sales and charged to SG&A:

 
  Three Months Ended
September 30,

  Nine Months Ended
September 30,

 
  2007
  2006
  2007
  2006
 
  (Amounts in thousands)

Distributor fees:                        
  Included in contractual adjustments and recorded as a reduction to product sales   $ 2,948   $ 2,151   $ 9,238   $ 6,784
  Charged to SG&A     3,210     2,826     9,644     7,860
   
 
 
 
    Total distributor fees   $ 6,158   $ 4,977   $ 18,882   $ 14,644
   
 
 
 
This excerpt taken from the GENZ 10-Q filed May 8, 2007.

Distributor Fees

EITF Issue No. 01-09, “Accounting for Consideration given by a Vendor to a Customer (including a Reseller of a Vendor’s Products)” specifies that cash consideration (including a sales incentive) given by a vendor to a customer is presumed to be a reduction of the selling prices of the vendor’s products or services and, therefore, should be characterized as a reduction of revenue. We include such fees in contractual adjustments, which are recorded as a reduction to product sales. That presumption is overcome and the consideration should be characterized as a cost incurred if, and to the extent that, both of the following conditions are met:

·       the vendor receives, or will receive, an identifiable benefit (goods or services) in exchange for the consideration; and

27




·       the vendor can reasonably estimate the fair value of the benefit received.

We record fees paid to our distributors for services as a charge to selling, general and administrative expenses, or SG&A, a component of operating expenses, only if the criteria set forth above are met. The following table sets forth the distributor fees recorded as a reduction to product sales and charged to SG&A (amounts in thousands):

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2007

 

2006

 

Distributor fees:

 

 

 

 

 

Included in contractual adjustments and recorded as a reduction to product sales

 

$

3,092

 

$

2,188

 

Charged to SG&A

 

2,976

 

2,546

 

Total distributor fees

 

$

6,068

 

$

4,734

 

 

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