This excerpt taken from the RAH DEF 14A filed Jun 17, 2008.
The Post cereals business recognizes revenues when title and risk of loss pass to customers, which occurs upon shipment or delivery of goods. Revenues are recorded net of consumer incentives and trade promotions and
KRAFT FOODS POST CEREALS BUSINESS
NOTES TO COMBINED FINANCIAL STATEMENTS(Continued)
include all shipping and handling charges billed to customers. Shipping and handling costs are classified as part of cost of sales. A provision for product return allowances is also recorded as a reduction of revenues within the same period that the revenue is recognized.