I need you to review an article on how wineries and wine distributors track wine spending (https://goo.gl/dDBhGa) and give me your expert opinion on how rebates redeemed by consumers would be classified for:
The concept is that Wine Producers, Wine Distributors and Retailers would independently create discount offers in the form of a rebate that consumers could obtain via a qualifying purchase (e.g. each party gives you a $1 rebate to buy a wine and you earn $3 upon buying the wine). In this model, each of the parties are independent of one another (e.g. the producers, distributors and retailers are not collaborating on the rebate offers, they each create their rebate offer independently).
Your assignment is to provide your educated opinion on how the cost of the consumer incentive would:
1. Be classified by each party: producer, distributor & retailer
2. Affect Revenue Recognition (e.g. ASC 606 paragraphs 606-10-25-23 through 25-30)
3. Be more beneficial if administered by one party or another (see below).
Regarding #3, Wine Producers could fund the discount offer directly to consumers even though they sold the product through distribution. Or they could offer the incentive funds to the distributor as a depletion allowance. Or they could offer the incentive funds to the retailer to manage.
I am not looking for legal or accounting advice. Your opinion on this matter is an opinion and nothing more.
Your proposal should provide a summary of how you will approach the project and any questions you have. The output of this project will be a one page document containing a write up of your conclusions as well as links to supporting content.
Timing is flexible. Positive reviews will be provided to those who complete the project.
February 19, 2018
I am looking for a mix of experience and value