Company: SSUP
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0000950170-25-034599
Chunk: 164

Company: SUPERIOR INDUSTRIES INTERNATIONAL INC
Filing Date: 2025-03-06
Form: 10-K
Item: Item 8
Chunk 164
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 weight variations from specifications used in pricing. These price adjustments are treated as variable consideration.  The Company estimates variable consideration by using the “most likely” amount estimation approach. For commodity prices, initial estimates are based on the commodity index at contract inception. Changes in commodity prices are monitored and revenue is adjusted as changes in the respective commodity index occur or as contracts with customers otherwise stipulate. Prices incorporate the wheel weight price component based on product specifications. Weights are measured initially during the quotation process and remeasured upon final design, and prices are adjusted as variations arise. In North America, OEM price adjustments due to manufacturing efficiencies are generally recognized as and when negotiated with customers. Contracts with European OEMs generally include annual price reductions based on expected manufacturing efficiencies over the life of the vehicle wheel program which are accrued as revenue is recognized. Customer contract prices are generally adjusted quarterly to incorporate price adjustments.  The Company collects and remits taxes assessed by various governmental authorities that are both imposed on and concurrent with revenue-producing transactions with its customers. These taxes may include, but are not limited to, sales, use, and value-added taxes. The collection and remittance of these taxes is reported on a net basis. Shipping costs are treated as a cost of fulfillment.  The Company’s warranties are limited to product specifications and the Company does not accept product returns unless the item is defective as manufactured. Accordingly, warranty costs are treated as a cost of fulfillment subject to accrual, rather than a performance obligation. The Company establishes provisions for both estimated returns and warranty when revenue is recognized for aftermarket sales. The Company establishes provisions for estimated returns and warranties for OEM sales when specific defective product or warranty issues are identified on the OEM products. In addition, the Company does not typically provide customers with the right to a refund but provides for product replacement.  Refer to Note 2, “Revenue” for further discussion on the Company’s revenue recognition.  Pre-Production CostsThe Company develops tooling necessary to produce wheels for its customers. Customer tooling reimbursement is generally based on quoted prices or cost not to exceed quoted prices. Tooling costs, which are explicitly recoverable from customers, are capitalized as preproduction costs and amortized to cost of sales over the average life of the vehicle wheel program. Similarly, customer reimbursements for tooling costs are deferred and amortized to net sales over the average life of the vehicle wheel program. Income Taxes Deferred tax assets and liabilities are recognized on the basis of future tax consequences attributable to temporary differences that exist between the financial reporting carrying value of