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Revenue Recognition and Contracts with Customers | 3 Months Ended
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Jul. 31, 2018
Revenue Recognition [Abstract] |
Revenue Recognition and Contracts with Customers | (3) Revenue Recognition and Contracts with Customers: On May 1, 2018, we adopted ASU 2014-09 using the modified retrospective approach, and recorded a contract liability, included in accrued expenses in the condensed consolidated balance sheet, for outstanding performance obligations related to sales promotions. Under the modified retrospective approach, results for reporting periods after May 1, 2018 will be presented in accordance with ASU 2014-09, while prior period amounts will not be adjusted and will continue to be reported in accordance with the previous guidance, Accounting Standards Codification, or ASC, Topic 605, Revenue Recognition. When evaluating our performance obligations, we disaggregate revenue based on major product lines which correlate with our reportable segments disclosed in Note 14 — Segment Reporting. Also, domestic sales account for 95% of our total net sales. There are no significant judgments or estimates used in the determination of performance obligations and the transaction price for the performance obligations are allocated on a pro-rata basis. There are no other contract costs that need to be considered based on the nature of our performance obligations. The following table outlines adjustments we recorded to our condensed consolidated balance sheet as a result of the adoption of ASU 2014-09 (in thousands):
|  | Balance at April 30, 2018 |  |  | Accounting Standard Adjustments |  |  | Opening Balance May 1, 2018 |
Accrued expenses |  | $ | 41,632 |  |  | $ | (17,176 | ) |  | $ | 24,456 |
Deferred revenue from contracts with customers |  | — |  |  |  | 23,305 |  |  |  | 23,305 |
Deferred taxes |  |  | 12,895 |  |  |  | (1,519 | ) |  |  | 11,376 |
Retained earnings |  |  | 389,146 |  |  |  | (4,610 | ) |  |  | 384,536 |
At April 30, 2018, we had accrued $17.2 million of sales promotions representing the cost of free goods earned but not yet shipped to our customers. On adoption of ASU 2014-09, we reversed this accrual and recorded deferred revenue of $23.3 million relating to these outstanding performance obligations, a deferred tax asset of $1.5 million, and a $4.6 million adjustment to reduce the opening balance of retained earnings at May 1, 2018. Deferred revenue is recorded in accrued expenses in the condensed consolidated balance sheet. The following table outlines the impact of the adoption of ASU 2014-09 on revenue recognized during the three months ended July 31, 2018 (in thousands):
Outstanding performance obligations with customers as of May 1, 2018 |  | $ | 23,305 |
Revenue recognized |  |  | (13,998 | )
Revenue deferred |  |  | 4,314 |
Outstanding performance obligations with customers as of July 31, 2018 |  | $ | 13,621 |
During the three months ended July 31, 2018, we recognized $14.0 million of revenue previously deferred as the performance obligation relating to sales promotions was satisfied. This recognition of revenue was partially offset by $4.3 million of additional deferred revenue for outstanding performance obligations relating to sales promotions that have not been satisfied, which was recorded to accrued expenses in the condensed consolidated balance sheet. This resulted in a $9.7 million net increase of revenue during the three months ended July 31, 2018. We estimate that revenue from the outstanding performance obligations as of July 31, 2018 will be recognized during fiscal 2019. As a result of the adoption of ASU 2014-09, gross margin was decreased by 0.9% and earnings per share was increased by $0.03.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -URI http://asc.fasb.org/topic&trid=2122369 + Details
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