LCRY » Topics » Change in Accounting Policy for Classification of Certain Shipping and Handling Costs

This excerpt taken from the LCRY 10-Q filed May 7, 2009.

Change in Accounting Policy for Classification of Certain Shipping and Handling Costs

The Company’s shipping and handling costs associated with transporting its products to customers were previously recorded as a component of Selling, general and administrative expenses in the Consolidated Statements of Operations. In accordance with Emerging Issues Task Force Issue No. 00-10 “Accounting for Shipping and Handling Fees and Costs,” the Company disclosed the amount of these shipping and handling costs that were included as Selling, general and administrative expenses (“SG&A”) in the notes to the Consolidated Financial Statements on Form 10-K.

Beginning in fiscal 2009, the Company changed its accounting policy to classify certain shipping and handling costs as Cost of revenues in the Consolidated Statement of Operations. The amounts classified as Cost of revenues represent shipping and handling costs associated with the distribution of finished product from their point of manufacturing directly to customers, distributors and wholly-owned international subsidiaries. Management believes that the classification of these shipping and handling costs as Cost of revenues better reflects the cost of producing and distributing its products and aligns external financial reporting with the results used internally to evaluate the Company’s operational performance. Shipping and handling costs associated with the transportation of demonstration units shipped to sales personnel and customers, as well as distribution costs associated with servicing the Company’s international customers through its foreign sales offices are recorded as SG&A, as they are considered direct selling expenses.

For purposes of comparability, approximately $0.4 and $1.3 million of shipping and handling costs previously classified as SG&A for the prior quarter and prior three quarters ended March 29, 2008, respectively has been reclassified to Cost of revenues to apply the new policy. This change in accounting principle and reclassification had no impact on operating income, net income, or earnings per share.

This excerpt taken from the LCRY 10-Q filed Feb 5, 2009.

Change in Accounting Policy for Classification of Certain Shipping and Handling Costs

The Company’s shipping and handling costs associated with transporting its products to customers were previously recorded as a component of Selling, general and administrative expenses in the Consolidated Statements of Operations. In accordance with Emerging Issues Task Force Issue No. 00-10 “Accounting for Shipping and Handling Fees and Costs,” the Company disclosed the amount of these shipping and handling costs that were included as Selling, general and administrative expenses (“SG&A”) in the notes to the Consolidated Financial Statements on Form 10-K.

Beginning in fiscal 2009, the Company changed its accounting policy to classify certain shipping and handling costs as Cost of revenues in the Consolidated Statement of Operations. The amounts classified as Cost of revenues represent shipping and handling costs associated with the distribution of finished product from their point of manufacturing directly to customers, distributors and wholly-owned international subsidiaries. Management believes that the classification of these shipping and handling costs as Cost of revenues better reflects the cost of producing and distributing its products and aligns external financial reporting with the results used internally to evaluate the Company’s operational performance. Shipping and handling costs associated with the transportation of demonstration units shipped to sales personnel and customers, as well as distribution costs associated with servicing the Company’s international customers through its foreign sales offices are recorded as SG&A, as they are considered direct selling expenses.

For purposes of comparability, approximately $0.5 and $0.9 million of shipping and handling costs previously classified as SG&A for the prior quarter and prior two quarters ended December 29, 2007, respectively has been reclassified to Cost of revenues to apply the new policy. This change in accounting principle and reclassification had no impact on operating income, net income, or earnings per share.

This excerpt taken from the LCRY 10-Q filed Nov 5, 2008.

Change in Accounting Policy for Classification of Certain Shipping and Handling Costs

The Company’s shipping and handling costs associated with transporting its products to customers were previously recorded as a component of Selling, general and administrative expenses in the Consolidated Statements of Operations. In accordance with Emerging Issues Task Force Issue No. 00-10 “Accounting for Shipping and Handling Fees and Costs,” the Company disclosed the amount of these shipping and handling costs that were included as Selling, general and administrative expenses (“SG&A”) in the notes to our Consolidated Financial Statements on Form 10-K.

Beginning in fiscal 2009, the Company changed its accounting policy to classify certain shipping and handling costs as Cost of revenues in the Consolidated Statement of Operations. The amounts classified as Cost of revenues represent shipping and handling costs associated with the distribution of finished product from their point of manufacturing directly to our customers, distributors and wholly-owned international subsidiaries. Management believes that the classification of these shipping and handling costs as Cost of revenues better reflects the cost of producing and distributing its products and aligns our external financial reporting with the results used internally to evaluate the Company’s operational performance. Shipping and handling costs associated with the transportation of demonstration units shipped to sales personnel and customers, as well as distribution costs associated with servicing the Company’s international customers through its foreign sales offices are recorded as SG&A, as they are considered direct selling expenses.

For purposes of comparability, approximately $0.4 million of shipping and handling costs previously classified as SG&A for the prior quarter ended September 29, 2007 has been reclassified to Cost of revenues to apply the new policy. This change in accounting principle and reclassification had no impact on operating income, net income, or earnings per share.

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