Company: THRM
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0000950170-25-023344
Chunk: 36

Company: Gentherm Inc
Filing Date: 2025-02-19
Form: 10-K
Item: Item 16
Chunk 36
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 the Company expects to be entitled based on historical experience and input from customer negotiations. From time to time, the Company provides cash incentives to customers in exchange for new business awards. The Company evaluates the underlying economics of each amount of consideration payable to a customer to determine the proper accounting by understanding the reasons for the payment, the rights and obligations resulting from the payment, the nature of the promises in the contract, and other relevant facts and circumstances. When the Company concludes that the payment is incurred only if the new business is obtained and the Company expects to recover the amounts from the customer over the term of the new business arrangement, the Company recognizes these payments as an asset. The Company amortizes the asset as a reduction of revenue as products related to the payment are transferred to the customer, based on the total amount of products expected to be sold over the term of the arrangement (generally 5 to 10 years following start of production). The Company evaluates the amounts capitalized each reporting period for recoverability and recognizes a reduction of revenue for any amounts that are no longer expected to be recovered over the term of the business arrangement. Payments to customers that are not capitalized are recognized as a reduction to revenue at the time of the commitment to make such payments. As of December 31, 2024 and 2023, total capitalized payments to customers were $14,276 and $7,305, respectively.There have been no impairment losses in relation to the costs capitalized. During the year ended December 31, 2024 and 2023, $447 and $179, respectively, was amortized into product revenues. The Company has no material contract assets or contract liabilities as of December 31, 2024.Medical RevenuesRevenues from our patient temperature management business unit are generated from the sale of products and equipment. Our medical products and equipment focus on patient temperature management. The Company sells medical products and equipment 

 F-11

GENTHERM INCORPORATED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)(In thousands, except share and per share data)  

primarily through distributor and group purchasing organization agreements. These agreements allow member participants to the distributor or group purchasing organization to make purchases at discounted prices negotiated by the distributor or group purchasing organization. A rebate is incurred at the point in time a member participant purchases product covered under these types of agreements. Rebates are accounted for as variable consideration, using an expected value, probability weighted approach, based on the level of sales to the distributor and