manufacturer sales incentives to consumers

Expenses1

1. 705-20Accounting for Consideration Received from a Vendor705 Cost of Sales and Services

   ASC 705-20 governs how a customer (often a reseller) accounts for cash, credits, coupons, or vouchers received from a vendor. The default rule is that vendor consideration reduces the purchase price of the goods or services acquired (705-20-25-1), unless it is payment for a distinct good or service transferred to the vendor, a reimbursement of specific incremental costs incurred to sell the vendor's products, or reimbursement for the vendor's sales incentives offered directly to consumers. The Subtopic also prescribes systematic and rational recognition of volume/loyalty rebates payable under binding arrangements.