Join today and have your say! It’s FREE!

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.
Please Try Again
{{ error }}
By providing my email, I consent to receiving investment related electronic messages from Stockhouse.

or

Sign In

Please Try Again
{{ error }}
Password Hint : {{passwordHint}}
Forgot Password?

or

Please Try Again {{ error }}

Send my password

SUCCESS
An email was sent with password retrieval instructions. Please go to the link in the email message to retrieve your password.

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.
Quote  |  Bullboard  |  News  |  Opinion  |  Profile  |  Peers  |  Filings  |  Financials  |  Options  |  Price History  |  Ratios  |  Ownership  |  Insiders  |  Valuation

Concordia Healthcare Corp. T.CXR.R



TSX:CXR.R - Post by User

Comment by adamchesson Jul 28, 2016 12:31pm
98 Views
Post# 25092244

RE:RE:RE:RE:Thoughts on revenue..... since the shorts won't help..

RE:RE:RE:RE:Thoughts on revenue..... since the shorts won't help..joesterth- It sounds to me that is exactly what they are saying? Revenues are recognized net of provision for returns, etc. As long as consistency is applied in recognizing revenues on a reasonable basis there should be low risk of substantially over stated revenues from period to period, imo. I wonder how many days they expect actual sales to end user customer from time of shipment? Average age of accounts receivable would be interesting info maybe? I am sure AMCo policies of revenue recognition are well established over several years and should not be in question at this point - likely conservative if anything?

joesterth wrote: I think the accounting standards on revenue recognition are pretty intuitive. Revenue should only be recognized when substantially all the risks and rewards of the product have been passed onto the customer. It's irrelevant if the product has gone all the way down the chain to the final consumer.

What's important is to understand if these customers are able to return any unsold products back to Concordia. If this is the case then this would be unearned revenue. The approach CXR takes is to recognize gross revenue and then offset by the risks retained from its returns policy.  

Pg19 of 2016 Q1 report states:
"Concordia has a returns policy that allows wholesalers to return the product within a specified period prior to and subsequent to the expiration date. Provisions for returns are recognized in the period in which the underlying sales are recognized, as a reduction of sales revenue"

TLDR; CXR's revenue recognition policy seems to be a bit aggressive; revenue net of its returns provisions would paint a more accurate picture.


<< Previous
Bullboard Posts
Next >>