NOTE 6 – CUSTOMER ALLOWANCES AND DISCOUNTS

In the normal course of business, the Corporation enters into agreements with certain customers for the supply of greeting cards and related products. The agreements are negotiated individually to meet competitive situations and, therefore, while some aspects of the agreements may be similar, important contractual terms may vary. Under these agreements, the customer may receive allowances and discounts including rebates, marketing allowances and various other allowances and discounts. These amounts are recorded as reductions of gross accounts receivable or included in accrued liabilities and are recognized as reductions of net sales when earned. These amounts are earned by the customer as product is purchased from the Corporation and are recorded based on the terms of individual customer contracts.

Trade accounts receivable are reported net of certain allowances and discounts. The most significant of these are as follows:


	February 28, 2013		February 29, 2012
Allowance for seasonal sales returns	$	24,574	$	34,285
Allowance for outdated products		11,156		10,976
Allowance for doubtful accounts		3,419		4,480
Allowance for marketing funds		28,610		26,679
Allowance for rebates		31,771		27,648

	$	99,530	$	104,068

Certain customer allowances and discounts are settled in cash. These accounts, primarily rebates, which are classified as “Accrued liabilities” on the Consolidated Statement of Financial Position, totaled $13,455 and $13,698 as of February 28, 2013 and February 29, 2012, respectively.