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Note 4 - Revenue Recognition | 6 Months Ended
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Dec. 31, 2019
Notes to Financial Statements |
Revenue from Contract with Customer [Text Block] |
( 4 ) | Revenue Recognition
Our reported revenue (net sales) consist substantially of product sales. We report product sales net of discounts and recognize them at the point in time when control transfers to the customer. For sales to our customers in our wholesale segment, control typically transfers when the product is shipped. For sales in our retail segment, control generally transfers upon delivery to the customer. We recognize shipping and handling expense as fulfillment activities (rather than as a promised good or service) when the activities are performed even if those activities are performed after the control of the good has been transferred. Accordingly, we record the expenses for shipping and handling activities at the same time we recognize net sales. We exclude from the measurement of the transaction price all taxes imposed on and concurrent with a specific revenue-producing transaction and collected by the entity from a customer, including sales, use, excise, value-added, and franchise taxes (collectively referred to as sales taxes). We do not adjust net sales for the effects of financing components as we believe that we will receive payment from the customer within one year of when we transfer control of the related goods. Estimated refunds for sales returns and allowances are based on our historical return patterns. We record these estimated refunds on a gross basis rather than on a net basis and have recorded an asset for product we expect to receive back from customers in Prepaid expenses and other current assets and a corresponding refund liability in Other current liabilitie s on our consolidated balance sheets. At December 31, 2019 and June 30, 2019, these amounts were immaterial. In many cases we receive deposits from customers before we have transferred control of our product to our customers, resulting in contract liabilities. These customer deposits are reported as a current liability in Customer deposits and d eferred r evenue on our consolidated balance sheets. At June 30, 2019 we had customer deposits of $56.7 million, of which we recognized $7.0 million and $53.6 million, respectively, as net sales upon delivery to the customer during the three and six months ended December 31, 2019. Customer deposits totaled $45.9 million at December 31, 2019. During October 2019 we introduced the Ethan Allen Member Program, which for a $100 annual fee, offers special members-only pricing, free shipping and white glove in-home delivery, and in our United States design centers, access to preferred financing plans. New membership fees are recorded as deferred revenue when collected from customers and recognized as revenue on a straight-line basis over the membership period of one year. These non-refundable fees are initially reported as a current liability in Customer d eposits and d eferred r evenue on our consolidated balance sheet while recognized revenue is reported within Net s ales on our consolidated statement of comprehensive income. Revenue recognized from annual membership fees is reported as a part of other revenue in the disaggregated revenue tables below. The following table disaggregates net sales by product category by segment for the three months ended December 31, 2019 ( in thousands):
|  | Wholesale |  |  | Retail |  |  | Total |
Upholstery (1) |  | $ | 44,329 |  |  | $ | 63,696 |  |  | $ | 108,025 |
Case goods (2) |  |  | 31,797 |  |  |  | 39,883 |  |  |  | 71,680 |
Accents (3) |  |  | 16,170 |  |  |  | 30,247 |  |  |  | 46,417 |
Other (4) |  |  | (407 | ) |  |  | 5,275 |  |  |  | 4,868 |
Total before intercompany eliminations |  | $ | 91,889 |  |  | $ | 139,101 |  |  |  | 230,990 |
Intercompany eliminations (5) |  |  |  |  |  |  |  |  |  |  | (56,416 | )
Consolidated net sales |  |  |  |  |  |  |  |  |  | $ | 174,574 |
The following table disaggregates net sales by product category by segment for the six months ended December 31, 2019 ( in thousands):
|  | Wholesale |  |  | Retail |  |  | Total |
Upholstery (1) |  | $ | 94,349 |  |  | $ | 126,932 |  |  | $ | 221,281 |
Case goods (2) |  |  | 65,826 |  |  |  | 78,643 |  |  |  | 144,469 |
Accents (3) |  |  | 34,167 |  |  |  | 60,229 |  |  |  | 94,396 |
Other (4) |  |  | (1,124 | ) |  |  | 10,563 |  |  |  | 9,439 |
Total before intercompany eliminations |  | $ | 193,218 |  |  | $ | 276,367 |  |  |  | 469,585 |
Intercompany eliminations (5) |  |  |  |  |  |  |  |  |  |  | (121,090 | )
Consolidated net sales |  |  |  |  |  |  |  |  |  | $ | 348,495 |
| ( 1 ) | Upholstery furniture includes fabric-covered items such as sleepers, recliners and other motion furniture, chairs, ottomans, custom pillows, sofas, loveseats, cut fabrics and leather.
| ( 2 ) | Case goods furniture includes items such as beds, dressers, armoires, tables, chairs, buffets, entertainment units, home office furniture, and wooden accents.
| ( 3 ) | Accents includes items such as window treatments and drapery hardware, wall décor, florals, lighting, clocks, mattresses, bedspreads, throws, pillows, decorative accents, area rugs, wall coverings and home and garden furnishings.
| ( 4 ) | Other includes membership revenue, product delivery sales, the Ethan Allen Hotel room rentals and banquets, sales of third -party furniture protection plans and other miscellaneous product sales less prompt payment discounts, sales allowances and other incentives.
| ( 5 ) | Represents the elimination of all intercompany wholesale segment sales to the retail segment during the period presented.

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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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