TESO » Topics » Note 2-Summary of Significant Accounting Policies

This excerpt taken from the TESO 10-K filed Feb 27, 2009.

Note 2—Summary of Significant Accounting Policies

FACE="Times New Roman" SIZE="2">Revenue Recognition

The Company recognizes revenues when the earnings process is complete and
collectability is reasonably assured. TESCO recognizes revenues when title and risk of loss of the equipment are transferred to the customer, with no right of return. Revenue in the Top Drive segment may be generated from contractual arrangements
that include multiple deliverables. Revenue from these arrangements is recognized as each item or service is delivered based on their relative fair value and when the delivered items or services have stand-alone value to the customer. For project
management services, service and repairs and rental activities, TESCO recognizes revenues as the services are rendered based upon agreed daily, hourly or job rates.

FACE="Times New Roman" SIZE="2">The Company provides product warranties on equipment sold pursuant to manufacturing contracts and provides for the anticipated cost of its warranties in cost of sales when sales revenue is recognized. The accrual of
warranty costs is an estimate based upon historical experience and upon specific warranty issues as they arise. The Company periodically reviews its warranty provision to assess its adequacy in light of actual warranty costs incurred. Because the
warranty accrual is an estimate, it is reasonably possible that future warranty issues could arise that could have a significant impact on the Company’s financial statements.

STYLE="margin-top:18px;margin-bottom:0px; margin-left:2%">Market for Common Stock

SIZE="2">TESCO’s common stock is traded on The Nasdaq Global Market (“NASDAQ”) under the symbol “TESO.” Until June 30, 2008, TESCO’s common stock was also traded on the Toronto Stock Exchange (“TSX”)
under the symbol “TEO.” Effective June 30, 2008, the Company voluntarily delisted its shares from the TSX.

This excerpt taken from the TESO 10-K filed Feb 27, 2008.

Note 2—Summary of Significant Accounting Policies

STYLE="margin-top:6px;margin-bottom:0px; margin-left:2%">Revenue Recognition

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%;padding-bottom:3px;line-Height:95%; vertical-align:top">Products Revenue is comprised of top drive sales, top drive after-market support and Casing Drive
System
TM (“CDSTM”) and related
product sales. Services Revenue is comprised of top drive rental operations and casing services other than CDS
TM and related product sales. The
Company recognizes revenues when the

 


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Table of Contents


Index to Financial Statements



TESCO CORPORATION

ALIGN="center">Notes to the Consolidated Financial Statements

 



earnings process is complete and collectibility is reasonably assured. TESCO recognizes revenues when title, risk of loss and physical possession of the
equipment is transferred to the customer, with no right of return. The Company has had few bill and hold transactions. However, the recognition of the revenues and related inventory costs on bill and hold transactions is deferred until the customer
takes physical possession of the equipment. For project management and service and rental activities, TESCO recognizes revenues as the services are rendered based upon agreed daily, hourly or job rates.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">The Company provides product warranties on equipment sold pursuant to manufacturing contracts and provides for the anticipated cost of its warranties in
cost of sales when sales revenue is recognized. The accrual of warranty costs is an estimate based upon historical experience and upon specific warranty issues as they arise. The Company periodically reviews its warranty provision to assess its
adequacy in the light of actual warranty costs incurred. Because the warranty accrual is an estimate, it is reasonably possible that future warranty issues could arise that could have a significant impact on the Company’s consolidated financial
statements.

EXCERPTS ON THIS PAGE:

10-K
Feb 27, 2009
10-K
Feb 27, 2008

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