Callaway 2010 Annual Report Download - page 86

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evaluated ASU 2009-17 and based on this analysis, the Company determined that the adoption of this statement
did not have a material impact on the Company’s consolidated financial statements.
In October 2009, the FASB issued ASU No. 2009-13, “Multiple-Deliverable Revenue Arrangements.” This
ASU establishes the accounting and reporting guidance for arrangements including multiple revenue-generating
activities. This ASU provides amendments to the criteria for separating deliverables, measuring and allocating
arrangement consideration to one or more units of accounting. The amendments in this ASU also establish a
selling price hierarchy for determining the selling price of a deliverable. Significantly enhanced disclosures are
also required to provide information about a vendor’s multiple-deliverable revenue arrangements, including
information about the nature and terms, significant deliverables, and its performance within arrangements. The
amendments also require providing information about the significant judgments made and changes to those
judgments and about how the application of the relative selling-price method affects the timing or amount of
revenue recognition. The amendments in this ASU are effective prospectively for revenue arrangements entered
into or materially modified in the fiscal years beginning on or after June 15, 2010. Early application is permitted.
Based on the Company’s evaluation of this ASU, the adoption of this statement will not have a material impact
on the Company’s consolidated financial statements.
In October 2009, the FASB issued ASU No. 2009-14, “Certain Revenue Arrangements That Include
Software Elements.” This ASU changes the accounting model for revenue arrangements that include both
tangible products and software elements that are “essential to the functionality,” and scopes these products out of
current software revenue guidance. The new guidance will include factors to help companies determine what
software elements are considered “essential to the functionality.” The amendments will now subject software-
enabled products to other revenue guidance and disclosure requirements, such as guidance surrounding revenue
arrangements with multiple-deliverables. The amendments in this ASU are effective prospectively for revenue
arrangements entered into or materially modified in the fiscal years beginning on or after June 15, 2010. Early
application is permitted. Based on the Company’s evaluation of this ASU, the adoption of this statement will not
have a material impact on the Company’s consolidated financial statements.
Revenue Recognition
Sales are recognized in accordance with Accounting Standards Codification (“ASC”) Topic 605, “Revenue
Recognition,” as products are shipped to customers, net of an allowance for sales returns and sales programs. The
criteria for recognition of revenue is met when persuasive evidence that an arrangement exists and both title and
risk of loss have passed to the customer, the price is fixed or determinable and collectability is reasonably
assured. Sales returns are estimated based upon historical returns, current economic trends, changes in customer
demands and sell-through of products. The Company also records estimated reductions to revenue for sales
programs such as incentive offerings. Sales program accruals are estimated based upon the attributes of the sales
program, management’s forecast of future product demand, and historical customer participation in similar
programs.
Revenues from gift cards are deferred and recognized when the cards are redeemed. In addition, the
Company recognizes revenue from unredeemed gift cards when the likelihood of redemption becomes remote
and under circumstances that comply with any applicable state escheatment laws. The Company’s gift cards have
no expiration. To determine when redemption is remote, the Company analyzes an aging of unredeemed cards
(based on the date the card was last used or the activation date if the card has never been used) and compares that
information with historical redemption trends.
Revenues from course credits in connection with the use of uPro GPS on-course range finders are deferred
when purchased and recognized when customers download the course credits for usage.
Amounts billed to customers for shipping and handling are included in net sales and costs incurred related to
shipping and handling are included in cost of sales.
F-8