Sales Returns and Allowances (SF.IS.SalesReturnsAllowances)

Sales Returns and Allowances (SF.IS.SalesReturnsAllowances) refers to reduction in gross sales, usually due to the return of merchandise for credit or cash refund, or a price reduction granted for damaged goods kept by the customer.

This item is a contra account to Gross Revenue (SF.IS.GrossRevenue). Gross Revenue (SF.IS.GrossRevenue) is adjusted by Excise Tax Payments (SF.IS.ExciseTaxesPayments) and Sales Returns and Allowances (SF.IS.SalesReturnsAllowances) to reach the Net Sales (SF.IS.NetSales) equivalent figure.
All adjustment items other than Excise Taxes Payments (SF.IS.ExciseTaxesPayments) are classified as Sales Returns and Allowances (SF.IS.SalesReturnsAllowances).

Sales Returns and Allowances (SF.IS.SalesReturnsAllowances) includes:

  • Cash Discounts
  • Agency Commissions for broadcasting & cable TV companies
  • Most revenue that is attributable to joint venture partners when the joint venture’s products are applied to the main activities of the parent company
  • Cost of subcontracts in construction companies
  • Crown royalties for oil and gas companies in Canada

Sales Returns and Allowances (SF.IS.SalesReturnsAllowances) does not include: