Audiovox 2010 Annual Report Download - page 121

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Audiovox Specialized Applications, LLC And Subsidiary
(A Limited Liability Company)
Notes To Financial Statements
Note 1. Nature of Business and Significant Accounting Policies
Nature of business:
Audiovox Specialized Applications ("ASA") "The Mobile Electronics Company" is an international supplier of mobile electronics in
certain niche markets in the Automotive Industry including: Recreational Vehicle, Van/SUV Conversion, Commercial Vehicle, Heavy
Duty Truck, Agricultural, Construction, Bus, Limousine, and Marine industries. Its proprietary line of products include: Flexvision
LCD Entertainment Systems, including DVD and video cassette players; Voyager Rear Observation and Bus Monitor/PA Systems and
radios; Nextgen Modular Chassis Systems; Aquatronics Marine Radios, Speakers, and Housings; Jensen Marine Radios, Speakers and
Housings and other Audio/Video Products; and Heavy Duty Systems, Radios and other Audio Products. These products are sold to
customers throughout the world, generally on 30-day terms. ASA is headquartered in Elkhart, Indiana and has a public distribution
center in Oregon.
Significant accounting policies:
Use of estimates:
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Principles of consolidation:
The consolidated financial statements include the accounts of the Company and a wholly-owned subsidiary. All significant
intercompany accounts have been eliminated in consolidation.
Revenue recognition:
The Company recognizes revenue from product sales at the time of passage of title and risk of loss to the customer either at F.O.B.
Shipping Point or F.O.B. Destination, based upon terms established with the customer. The Company's selling price is fixed and
determined at the time of shipment and collectability is reasonably assured and not contingent upon the customer's resale of the
product. The customers are generally not given rights of return. In the event customers are granted rights of return, the Company
estimates and records an allowance for future returns. At November 30, 2009 and 2008 no such allowance was deemed
necessary. Product sales are generally not subject to acceptance or installation by Company or customer personnel.
The Company recognizes royalty revenue at the time the related product is purchased by Audiovox Corporation ("Audiovox"), a
member of ASA. Total royalty revenue under this agreement for the years ended November 30, 2009, 2008, and 2007 was
approximately $263,000, $629,000, and $831,000 respectively and is included in net sales.
All sales transactions are denominated in U.S. dollars.
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Source: AUDIOVOX CORP, 10-K, May 14, 2010 Powered by Morningstar® Document Research℠