Audiovox 2003 Annual Report Download - page 100

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AUDIOVOX CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
November 30, 2001, 2002 and 2003
(Dollars in thousands, except share and per share data)
the nature as well as the creation date of the VIE. VIEs created
after January 31, 2003, but prior to January 1, 2004, may be
accounted for either based on the original interpretation or the
Revised Interpretations. However, the Revised Interpretations
must be applied no later than the first quarter of fiscal year
2004. VIEs created after January 1, 2004 must be accounted for
under the Revised Interpretations. The Company is currently
assessing the impact of the adoption of FIN 46.
In August 2003, the EITF reached a final consensus regarding
Issue No. 03−5, "Applicability of AICPA Statement of Position
97−2, Software Revenue Recognition to Non−Software Deliverables
in an Arrangement Containing More−Than−Incidental Software". EITF
03−5 involves whether non−software deliverables included in an
arrangement that contains software that is more−than−incidental
to the products or services as a whole are included with the
scope of SOP 97−2 "Software Revenue Recognition". This new
pronouncement will not have an impact on the Company's financial
condition or results of operations.
In December 2003, the SEC issued Staff Accounting Bulletin (SAB)
No. 104, "Revenue Recognition" (SAB No. 104), which codifies,
revises and rescinds certain sections of SAB No. 101, "Revenue
Recognition", in order to make this interpretive guidance
consistent with current authoritative accounting and auditing
guidance and SEC rules and regulations. The changes noted in SAB
No. 104 did not have a material effect on our consolidated
results of operations, consolidated financial position or
consolidated cash flows.
(z) Shipping and Handling Costs
In fiscal 2001, the Company adopted the provisions of EITF Issue
No. 00−10, "Accounting for Shipping and Handling Fees and Costs",
which requires the Company to report all amounts billed to a
customer related to shipping and handling as revenue. The Company
includes all costs incurred for shipping and handling as cost of
sales. The Company has reclassified such billed amounts, which
were previously netted in cost of sales to net sales. As a result
of this reclassification, net sales and cost of sales were
increased by $1,548 for year ended November 30, 2001.
(aa) Issuances of Subsidiary Stock
The Company's accounting policy on the issuances of subsidiary
stock is to recognize through earnings the gain on the sale of
the shares as long as the sale of the shares is not part of a
broader corporate reorganization planned or contemplated by the
(Continued)
99