Revenue Recognition

9 Months Ended

Sep. 28, 2019

Revenue Recognition [Abstract]

Revenue Recognition

Note H – Revenue Recognition

The Company’s revenues result from the sale of goods and services and reflect the consideration to which the Company expects to be entitled.  The Company records revenues based on a five-step model in accordance with ASU No. 2016-10, Revenue from Contracts with Customers (“Topic 606”).  The Company has defined purchase orders as contracts in accordance with ASU 2016-10. For its customer contracts, the Company identifies its performance obligations, which are delivering goods or services, determining the transaction price, allocating the contract transaction price to the performance obligations (when applicable), and recognizing the revenue when (or as) the performance obligation is transferred to the customer.  A good or service is transferred when the customer obtains control of that good or service.  The Company’s revenues are recorded at a point in time from the sale of tangible products.  Revenues are recognized when products are shipped.

The Company elected the Modified Retrospective Method (the “Cumulative Effect Method”) to comply with ASU 2016-10.  ASU 2016-10 was adopted on December 31, 2017, which was the first day of the Company’s 2018 fiscal year.  The financial effect of ASU 2016-10 on the September 28, 2019 financial statements was not significant.

Customer volume rebates, product returns, discount and allowance are variable consideration and are recorded as a reduction of revenue in the same period that the related sales are recorded.  The Company has reviewed the overall sales transactions for variable consideration and has determined that these costs are not material.

Refer to Note L for revenues reported by segment.  The Company has not experienced any impairment losses, has no future performance obligations and does not capitalize costs to obtain or fulfill contracts.