Reserve for Sales Returns

6 Months Ended

Sep. 30, 2018

Reserve For Sales Returns

Reserve for sales Returns

NOTE 12 – RESERVE FOR SALES RETURNS

A return program for defective goods is negotiated with each of our wholesale customers on a year-to-year basis. Customers are either allowed to return defective goods within a specified period of time after shipment (between 6 and 9 months) or granted a “defective allowance” consisting of a fixed percentage (between 1% and 5%) off of invoice price in lieu of returning defective products. The Company does make occasional exceptions to this return policy and accordingly records a sales return reserve based on historic return amounts, specific exceptions as identified and management estimates.

The Company records a sales reserve for its return goods programs at the time of sale for estimated sales returns that may occur. The liability for defective goods is included in the reserve for sales returns on the condensed consolidated balance sheets.

Changes in the Company’s reserve for sales returns are presented in the following table:

	Six Months Ended
	September 30,			September 30,
	2018			2017
Reserve for sales returns at beginning of the year	$	726,000		$	600,000	*
Provision for estimated sales returns		1,883,366			3,011,677
Sales returns received		(1,142,739	)		(1,106,967	)
Reserve for sales returns at end of the period	$	1,466,627		$	2,504,710

* The reserve for sales returns at the beginning of the period ended September 30, 2017 has beed adjusted to reflect the full retrospective adoption of ASC 606 effective April 1, 2018