Footnote 2 — Revenue Recognition

Net sales include sales of consumer and commercial products across the Company’s four segments: Food and Appliances, Home and Outdoor Living, Learning and Development and Other. In accordance with Topic 606, the Company recognizes revenue when performance obligations under the terms of a contract with the customer are satisfied, which generally occurs either on shipment or on delivery based on contractual terms. Timing of revenue recognition for the majority of the Company’s sales remains consistent between the new and old revenue standard. However, previously under Topic 605, the Company deferred recognition of revenue for limited FOB shipping point transactions where it had a practice of providing the buyer with replacement goods at no additional cost if there was loss or damage while the goods were in transit. Under Topic 606, the Company recognizes revenue at the time of shipment for these transactions. This change did not have a material impact on the Company’s consolidated financial statement upon adoption on January 1, 2018.

The Company measures revenue as the amount of consideration for which it expects to be entitled in exchange for transferring goods or providing services. Certain customers may receive cash and/or non-cash incentives such as cash discounts, returns, customer discounts (such as volume or trade discounts), cooperative advertising and other customer-related programs, which are accounted for as variable consideration. In some cases, the Company must to apply judgment, including contractual rates and historical payment trends, when estimating variable consideration.

Sales taxes and other similar taxes are excluded from revenue. The Company has elected to account for shipping and handling activities as a fulfillment cost as permitted by the standard. The Company has elected not to disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which revenue is recognized at the amount to which it has the right to invoice for services performed.

The following table disaggregates revenue by major product grouping source and geography for the period indicated (in millions):


	Three Months Ended September 30, 2018
	Food and Appliances		Home and Outdoor Living		Learning and Development		Other			Total
Appliances and Cookware	$	453.6	$	—		—	$	—		$	453.6
Food		267.9		—		—		—			267.9
Connected Home and Security		—		96.4		—		—			96.4
Home Fragrance		—		260.9		—		—			260.9
Outdoor and Recreation		—		369.2		—		—			369.2
Baby and Parenting		—		—		301.6		—			301.6
Writing		—		—		527.6		—			527.6
Other		—		—		—		—			—

Total	$	721.5	$	726.5		829.2	$	—		$	2,277.2

North America	$	551.0	$	532.8	$	596.4	$	—		$	1,680.2
International		170.5		193.7		232.8		—			597.0

Total	$	721.5	$	726.5		829.2	$	—		$	2,277.2


	Nine Months Ended September 30, 2018
	Food and Appliances		Home and Outdoor Living		Learning and Development		Other			Total
Appliances and Cookware	$	1,215.1	$	—		—	$	—		$	1,215.1
Food		660.4		—		—		—			660.4
Connected Home and Security		—		273.6		—		—			273.6
Home Fragrance		—		648.7		—		—			648.7
Outdoor and Recreation		—		1,215.6		—		—			1,215.6
Baby and Parenting		—		—		848.7		—			848.7
Writing		—		—		1,426.2		—			1,426.2
Other		—		—		—		2.0			2.0

Total	$	1,875.5	$	2,137.9		2,274.9	$	2.0		$	6,290.3

North America	$	1,357.7	$	1,531.9	$	1,606.5	$	2.2		$	4,498.3
International		517.8		606.0		668.4		(0.2	)		1,792.0

Total	$	1,875.5	$	2,137.9		2,274.9	$	2.0		$	6,290.3

Accounts Receivable, Net

Accounts receivables, net, include amounts billed and due from customers. Payment terms vary but generally are 90 days or less. The Company evaluates the collectability of accounts receivable based on a combination of factors. When aware of a specific customer’s inability to meet its financial obligations, such as in the case of bankruptcy filings or deterioration in the customer’s operating results or financial position, the Company records a specific reserve for bad debt to reduce the related receivable to the amount the Company reasonably believes is collectible. The Company also records reserves for bad debt for all other customers based on a variety of factors, including the length of time the receivables are past due and historical collection experience. Accounts deemed uncollectible are written off, net of expected recoveries.

During the nine months ended September 30, 2018, the Company wrote-off $28.7 million, primarily related to one of its top 10 customers in the Baby division within the Learning and Development segment, who filed for liquidation of its bankrupt operations in March 2018. There were no material accounts receivable balances written off during the three months ended September 30, 2018.