$HHSE Changes in Revenue Recognition at Hannover
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Posted On: 05/02/2019 2:37:07 PM
$HHSE
Changes in Revenue Recognition at Hannover House impact Home Video ReportingEarnings Announcement | 05/02/2019
The recently released 2018 year-end results for Hannover House, Inc. (OTC: HHSE) show a change in revenue recognition for the 25-year-old home video and media distribution company. In response to declining "physical" sales (of actual DVD and BluRay units), Hannover House has implemented a revenue reserver hold-back of eighty percent (80%), which is a far more conservative reserve than any of the major studios or competitive independent distributors. As a result of this revenue reserve, Hannover House deferred the recognition of $210,410 in shipped videos that, under previous accounting procedures, would have been immediately recognized as revenues. Hannover House had no revenue reserves held-back for the 2nd and 3rd quarter of 2018, but did reserve $69,403 during the 1st quarter of 2018, representing twenty percent (20%) of the company's DVD and BluRay shipments for that quarter.
"We see the change in revenue recognition as one of the steps towards our cash-only accounting goal," said Hannover House C.E.O. Eric Parkinson. "In the past, the company would recognize between 75% and 100% of home video sales, which often required a later write-down if unsold merchandise returns exceeded our reserves. This became problematic, especially in respect to year-to-year reporting, in which returns during a specific calendar year could have an impact later against revenues for the following year. By implementing a very large revenue reserve, we are better able to recognize the operational benefits of retail sales as they occur, as opposed to as they are initially shipped."
Hannover House, Inc. is a Wyoming-based corporation, and is also the parent company of Medallion Releasing, Inc. and Bookworks,Inc., both Arkansas domiciled entities. The company is currently trading on the OTC Pinksheets markets, but plans to file a Form 10 registration with the Securities and Exchange Commission to enable the stock to be traded as an OTC: QB equity.
Changes in accounting procedures and revenue recognition have been implemented in order to better conform to auditing procedures that Hannover House is now following. Hannover House was formed in 1993 as Truman Press, Inc., a book publishing company. The company added DVDs as a product line in 2002 and has since released over 450 titles. In December, 2009, Truman Press, Inc., dba "Hannover House" merged with Wyoming real estate company Target Development Group, Inc. in a transaction that resulted in Hannover House gaining both a public company listing as well as control of the combined companies. In April of 2012, after a thorough review of the company's application and history, the Financial Industry Regulatory Authority (FINRA) approved the formal name change of the corporation to: "Hannover House, Inc." and the ticker symbol change to: "HHSE."
Changes in Revenue Recognition at Hannover House impact Home Video ReportingEarnings Announcement | 05/02/2019
The recently released 2018 year-end results for Hannover House, Inc. (OTC: HHSE) show a change in revenue recognition for the 25-year-old home video and media distribution company. In response to declining "physical" sales (of actual DVD and BluRay units), Hannover House has implemented a revenue reserver hold-back of eighty percent (80%), which is a far more conservative reserve than any of the major studios or competitive independent distributors. As a result of this revenue reserve, Hannover House deferred the recognition of $210,410 in shipped videos that, under previous accounting procedures, would have been immediately recognized as revenues. Hannover House had no revenue reserves held-back for the 2nd and 3rd quarter of 2018, but did reserve $69,403 during the 1st quarter of 2018, representing twenty percent (20%) of the company's DVD and BluRay shipments for that quarter.
"We see the change in revenue recognition as one of the steps towards our cash-only accounting goal," said Hannover House C.E.O. Eric Parkinson. "In the past, the company would recognize between 75% and 100% of home video sales, which often required a later write-down if unsold merchandise returns exceeded our reserves. This became problematic, especially in respect to year-to-year reporting, in which returns during a specific calendar year could have an impact later against revenues for the following year. By implementing a very large revenue reserve, we are better able to recognize the operational benefits of retail sales as they occur, as opposed to as they are initially shipped."
Hannover House, Inc. is a Wyoming-based corporation, and is also the parent company of Medallion Releasing, Inc. and Bookworks,Inc., both Arkansas domiciled entities. The company is currently trading on the OTC Pinksheets markets, but plans to file a Form 10 registration with the Securities and Exchange Commission to enable the stock to be traded as an OTC: QB equity.
Changes in accounting procedures and revenue recognition have been implemented in order to better conform to auditing procedures that Hannover House is now following. Hannover House was formed in 1993 as Truman Press, Inc., a book publishing company. The company added DVDs as a product line in 2002 and has since released over 450 titles. In December, 2009, Truman Press, Inc., dba "Hannover House" merged with Wyoming real estate company Target Development Group, Inc. in a transaction that resulted in Hannover House gaining both a public company listing as well as control of the combined companies. In April of 2012, after a thorough review of the company's application and history, the Financial Industry Regulatory Authority (FINRA) approved the formal name change of the corporation to: "Hannover House, Inc." and the ticker symbol change to: "HHSE."
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