definiens: shall mean, with respect to any Product, the reve nues derived from the sale by Purchaser, its Affiliates, licensees and assignees from the sale o f a Product to independent third parties, less : ( i ) all normal and customary discounts ( such as cash discounts, volume discounts, chargebacks, allowances ( including shel f stock adjustments and promotional allowances that are not selling or marketing - related operational expenses ), government mandated rebates and other rebates, cred its, and Product returns ), ( ii ) freight, shipping, insurance costs relating to the shipment of the Product, duti es and taxes ; and ( iii ) bad debt related to the Pro duct ( as such bad debts are actually incurred ) . Net Sales shall be determined on an accr ual basis ( except for clause ( iii ) above ) in accord ance with generally accepted accounting principles in the Ter ritory, applied on a basis consistent with Purchase r ’s annual audited financial statements . Subject to the forego ing, Purchaser will not deduct any marketing, selli ng, advertising or distribution expenses of any kind to determine Net Sales