Company: PBH
Filing Date: 2025-05-09
Form Type: 10-K
Source: 0001295947-25-000017
Chunk: 101

Company: Prestige Consumer Healthcare Inc.
Filing Date: 2025-05-09
Form: 10-K
Item: Item 8
Chunk 101
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 to customers are accounted for as variable consideration and recorded as a reduction in sales.We record an estimate of future product returns, chargebacks and logistics deductions concurrent with recording sales, which is made using the most likely amount method that incorporates (i) historical return rates, (ii) current economic trends, (iii) changes in customer demand, (iv) product acceptance, (v) seasonality of our product offerings and (vi) the impact of changes in product formulation, packaging and advertising. We participate in the promotional programs of our customers to enhance the sale of our products.  These promotional programs consist of direct-to-consumer incentives, such as coupons and temporary price reductions, as well as incentives to our customers, such as allowances for new distribution including slotting fees, and cooperative advertising. The costs of such activities are recorded as a reduction to revenue when the related sale takes place.  Estimates of the costs of these promotional programs are derived using the most likely amount method, which incorporates (i) historical sales experience, (ii) the current promotional offering, (iii) forecasted data, (iv) current market conditions and (v) communication with customer purchasing/marketing personnel.  At the completion of the promotional program, the estimated amounts are adjusted to actual results.Practical ExpedientsDue to the nature (short duration) of our contracts with customers, we apply the practical expedient related to the disclosure of remaining performance obligations.  Remaining performance obligations relate to contracts with a duration of less than one year, in which we have the right to invoice the customer at the time the performance obligation is satisfied for the amount of revenue recognized at that time.  Accordingly, we have elected the practical expedient available under ASC 606 not to disclose remaining performance obligations for our contracts.  The period between when control of the promised products transfers to the customer and when the customer pays for the products is one year or less.  As such, we do not adjust product consideration for the effects of a significant financing component.  The amortization period of any asset resulting from incremental costs of obtaining a contract would be one year or less. 

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We expense incremental direct costs of obtaining a contract (broker commissions) when the related sale takes place. We account for shipping and handling costs as fulfillment activities and therefore recognize them upon shipment of goods.Cost of SalesCost of sales includes costs related to the manufacturing of our products, including raw materials, direct labor and indirect plant costs (including depreciation), warehousing costs, inbound and outbound shipping costs and handling and storage costs