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Revenue Recognition | 3 Months Ended
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Apr. 02, 2021
Revenue from Contract with Customer [Abstract] |
Revenue Recognition | Revenue Recognition The Company’s sales are divided into two main categories: (i) bottle/can sales and (ii) other sales. Bottle/can sales include products packaged primarily in plastic bottles and aluminum cans. Bottle/can net pricing is based on the invoice price charged to customers reduced by any promotional allowances. Bottle/can net pricing per unit is impacted by the price charged per package, the sales volume generated for each package and the channels in which those packages are sold. Other sales include sales to other Coca‑Cola bottlers, “post-mix” products, transportation revenue and equipment maintenance revenue. Post-mix products are dispensed through equipment that mixes fountain syrups with carbonated or still water, enabling fountain retailers to sell finished products to consumers in cups or glasses. The Company’s contracts are derived from customer orders, including customer sales incentives, generated through an order processing and replenishment model. Generally, the Company’s service contracts and contracts related to the delivery of specifically identifiable products have a single performance obligation. Revenues do not include sales or other taxes collected from customers. The Company has defined its performance obligations for its contracts as either at a point in time or over time. Bottle/can sales, sales to other Coca‑Cola bottlers and post-mix sales are recognized when control transfers to a customer, which is generally upon delivery and is considered a single point in time (“point in time”). Point in time sales accounted for approximately 96% of the Company’s net sales in the first quarter of 2021 and approximately 97% of the Company’s net sales in the first quarter of 2020. Other sales, which include revenue for service fees related to the repair of cold drink equipment and delivery fees for freight hauling and brokerage services, are recognized over time (“over time”). Revenues related to cold drink equipment repair are recognized as the respective services are completed using a cost-to-cost input method. Repair services are generally completed in less than one day but can extend up to one month. Revenues related to freight hauling and brokerage services are recognized as the delivery occurs using a miles driven output method. Generally, delivery occurs and freight charges are recognized in the same day. Over time sales orders open at the end of a financial period are not material to the condensed consolidated financial statements. The following table represents a disaggregation of revenue from contracts with customers:
|  | First Quarter |  |
(in thousands) |  | 2021 |  | 2020 |  |  |  |
Point in time net sales: |  |  |  |  |  |  |  |
Nonalcoholic Beverages - point in time |  | $ | 1,225,212 |  |  | $ | 1,132,475 |  |  |  |  |
Total point in time net sales |  | $ | 1,225,212 |  |  | $ | 1,132,475 |  |  |  |  |
Over time net sales: |  |  |  |  |  |  |  |
Nonalcoholic Beverages - over time |  | $ | 9,878 |  |  | $ | 10,106 |  |  |  |  |
All Other - over time |  | 34,767 |  |  | 30,440 |  |  |  |  |
Total over time net sales |  | $ | 44,645 |  |  | $ | 40,546 |  |  |  |  |
Total net sales |  | $ | 1,269,857 |  |  | $ | 1,173,021 |  |  |  |  |
The Company’s allowance for doubtful accounts in the condensed consolidated balance sheets includes a reserve for customer returns and an allowance for credit losses. The Company experiences customer returns primarily as a result of damaged or out-of-date product. At any given time, the Company estimates less than 1% of bottle/can sales and post-mix sales could be at risk for return by customers. Returned product is recognized as a reduction to net sales. The Company’s reserve for customer returns was $3.6 million as of both April 2, 2021 and December 31, 2020. The Company estimates an allowance for credit losses, based on historic days’ sales outstanding trends, aged customer balances, previously written-off balances and expected recoveries up to balances previously written off, in order to present the net amount expected to be collected. Accounts receivable balances are written off when determined uncollectible and are recognized as a reduction to the allowance for credit losses. A reconciliation of the activity for the allowance for credit losses is as follows:
|  | First Quarter
(in thousands) |  | 2021 |  | 2020
Beginning balance - allowance for credit losses |  | $ | 18,070 |  |  | $ | 10,232 |
Additions charged to costs and expenses |  | 1,270 |  |  | 3,167 |
Deductions |  | (2,242) |  |  | (787) |
Ending balance - allowance for credit losses |  | $ | 17,098 |  |  | $ | 12,612 |

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 + Details
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