Deferred Revenue Looks Pretty Good...
Revenue Recognition
Revenue is recognized net of discounts, rebates, promotional adjustments, price adjustments and estimated returns and upon transfer of title and risk to the customer which occurs at shipping (F.O.B. terms). Upon shipment to various customers when all performance obligations are met and collectability is reasonably assured revenue is recognized. Upon shipment to specific customers with the right of return the Company defers revenues as returns are not reasonably estimable. As of September 30, 2013, deferred revenue totaled $1,358,186.
Deferred Revenue and Deferred Cost of Goods Sold
Deferred revenue consists substantially of amounts billed or payments received in advance of revenue recognition. Deferred cost of goods sold as of September 30, 2013 of $607,806, related to deferred product revenues includes direct product costs. Once all revenue recognition criteria have been met, the deferred revenues and associated cost of goods sold are recognized.
