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A review of the consensuses reached at the November EITF meeting.
At it's November meeting-the first in four months, the Task Force discussed nine topics, but only reached a consensus on two Issues. In addition, it finalized a codification of prior consensuses on the accounting for claims-made insurance and retroactive insurance contracts and related topics.
The consolidated issues, which will be issued as one codification, are Issue 03-08, Issue 86-12, and Topic D-79. Following is a brief review of the two consensuses reached by the Task Force.
Issue 03-10
This Issue, "Application of EITF Issue 02-16, 'Accounting by a Customer (including a reseller) for Certain Consideration Received from a Vendor,' by Resellers to Sales Incentives Offered to Consumers by Manufacturers," had resulted in a tentative consensus at the July meeting. Due to its importance and some controversy, it was published for comment. It was discussed again at the November meeting in the light of the comments received.
Manufacturers generally sell their products to resellers who then sell those products to consumers. In some cases, manufacturers will offer sales discounts and incentives directly to consumers-for example, coupons-in order to stimulate consumer demand for their products.
The reseller will generally agree to accept, at the point of sale to the consumer, the manufacturer's coupon as a reduction in the price paid by the consumer and then seeking reimbursement from the manufacturer. In other instances, the consumer purchases the product from the...