RE: As it's quiet4 Aug 2022 12:06
Gixer - re the O/No unit price - be it per unit or per order:
FF+O for consumers
Sub = £15 per pack Free Shipping Worldwide.
Non-Sub = £19.95 per pack Free Shipping Worldwide
What about the VAT? I assume this is included too.
Although the consumer is charged an all-inclusive price and shipping and VAT are not broken out, they are in fact broken out in the PXS system and the income reported is net of these two items hence the unit price per O/No being that much lower. There may also be an upfront Amazon commission payment deduction made for Amazon sales. In addition to this any sales made to H&B would be at a much lower price per pack too (customer contract price).
If each order number represents an Order not a Pack then the equation is much worse.
From 2021 PXS FY Accounts
‘Revenue
(i)Performance obligations and timing of revenue recognition. The group’s revenue is primarily derived from: • The group’s profit-sharing Alliance Agreement with DSM, with the group’s profit-sharing income from this agreement being recognised on an accruals basis in accordance with the substance of the agreement, based on the receipt from DSM of the relevant information to enable calculation of the profit-sharing payment due to the group. • Selling goods, with revenue recognised at a point in time when control of the goods has transferred to the customer. Revenue from sales to external customers is recognised when goods are despatched. There is limited judgment needed in identifying the point at which these performance obligations are satisfied.
(ii)Determining the transaction price. The amount of revenue to be earned is determined by reference to (i) the provisions of the group’s profit sharing Alliance Agreement with DSM, which is based on DSM’s fixed price contracts with their customers, and (ii) the fixed price contracts which the group has with its customers, in respect of the direct sale of goods to these customers. Variable consideration relating to volume rebates has been constrained in estimating contract revenue in order that it is highly probable there will not be a future reversal in the amount of revenue recognised when the amount of volume rebates has been determined.
(iii) Allocating amounts to performance obligations. For most contracts, there is a fixed unit price for each product sold, with discounts given for bulk orders placed at a specific time. Therefore, there is no judgement involved in allocating the contract price to each unit ordered in such contracts (it is the total contract price divided by the number of units ordered). Sales rebate and discount reserves are established based on management’s best estimate of the amounts necessary to meet claims by customers in respect of these rebates and discounts. A refund liability is made at the time of sale and updated at the end of each reporting period for changes in circumstances.’
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