FULLER H B CO Revenue Disclosure

Note 10: Revenue

 

Revenue Recognition

 

We sell a variety of adhesives, sealants and other specialty chemical products to a diverse customer base. The vast majority of our arrangements contain a single performance obligation to transfer manufactured goods to the customer as governed by an individual purchase order.

 

We recognize revenue at the amount of consideration to which we expect to be entitled in exchange for transferring the promised goods to the customer. The transaction price includes an estimation of any variable amounts of consideration to which we will be entitled. The most common forms of variable consideration within our arrangements are customer rebates, which are recorded as a reduction to revenue at the time of the initial sale using the expected value method. The expected value method is the sum of probability-weighted amounts in a range of possible consideration amounts and is based on a consideration of historical, current and forecast information. Changes in estimates are updated each reporting period. There are no material instances where variable consideration is constrained and not recorded at the initial time of sale. Product returns are recorded as a reduction to revenue based on historical experience and anticipated sales returns that occur in the normal course of business. We primarily have assurance-type warranties that do not result in separate performance obligations. We have elected to present revenue net of sales taxes and other similar taxes.

 

We recognize revenue when control of goods is transferred to the customer. For the vast majority of our arrangements, control transfers at a point in time either upon shipment or upon delivery of the goods to the customer. The timing of transfer of control is determined considering the timing of the transfer of legal title, physical possession, and risks and rewards of goods to the customer.

 

We record shipping and handling revenue in net revenues and outbound shipping and handling costs in cost of goods sold. The majority of our shipping and handling activities are performed prior to transfer of control of the goods to the customer. For those arrangements where we provide shipping and handling services after control of the goods has transferred to the customer, we have elected the practical expedient allowed under ASC 606 to account for these activities as a fulfillment cost rather than as a separate performance obligation. Election of this practical expedient resulted in an increase in the balance of retained earnings of $1,776 at the beginning of fiscal 2019. Based on an analysis of the financial statement line items affected in the application of ASU No. 2014-09 as compared with previous reporting, the Company has determined that the quantitative changes to each financial statement line item are not material. As a result, for the year ended November 30, 2019, the Company is not disclosing the quantitative amount by which each financial statement line item is affected in the current reporting by the application of this ASU as compared with the guidance that was in effect before the change.

 

Practical Expedients Elected

 

We have elected the following practical expedients allowable under ASC 606:

-	Election to present revenue net of sales taxes and other similar taxes

-	Election to account for shipping and handling services performed after control has transferred to the customer as fulfillment activities

 

Disaggregated Revenue Information

 

We view the following disaggregation of revenue by product type as useful to understanding the composition of revenue recognized during year ended November 30, 2019, December 1, 2018 and December 2, 2017:

 

		November 30, 2019
		Americas								Asia				Construction				Engineering
		Adhesives				EIMEA				Pacific				Adhesives				Adhesives				Total
Durable assembly		$	277,759			$	249,482			$	66,366			$	-			$	-			$	593,607
Hygiene			128,527				175,857				113,144				-				-				417,528
Packaging			284,100				125,820				55,941				-				-				465,861
Paper and other			332,389				89,754				36,134				-				-				458,277
Construction			-				-				-				394,912				-				394,912
Engineering			-				-				-				-				566,815				566,815
		$	1,022,775			$	640,913			$	271,585			$	394,912			$	566,815			$	2,897,000

 

		December 1, 2018
		Americas								Asia				Construction				Engineering
		Adhesives				EIMEA				Pacific				Adhesives				Adhesives				Total
Durable assembly		$	287,520			$	275,294			$	67,083			$	-			$	-			$	629,897
Hygiene			129,628				191,008				115,687				-				-				436,323
Packaging			286,979				133,077				55,232				-				-				475,288
Paper and other			347,238				98,069				40,160				-				-				485,467
Construction			-				-				-				452,046				-				452,046
Engineering			-				-				-				-				561,981				561,981
		$	1,051,365			$	697,448			$	278,162			$	452,046			$	561,981			$	3,041,002

 

		December 2, 2017
		Americas								Asia				Construction				Engineering
		Adhesives				EIMEA				Pacific				Adhesives				Adhesives				Total
Durable assembly		$	250,699			$	171,731			$	61,253			$	-			$	-			$	483,683
Hygiene			131,150				179,249				108,777				-				-				419,176
Packaging			280,775				120,275				54,408				-				-				455,458
Paper and other			240,153				93,184				40,258				-				-				373,595
Construction			-				-				-				260,466				-				260,466
Engineering			-				-				-				-				313,665				313,665
		$	902,777			$	564,439			$	264,696			$	260,466			$	313,665			$	2,306,043