Where should a vendor rebate I receive go on my income statement? Revenue or COGS reduction?

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Accounting For Vendor RebatesI currently show a revenue line on my income statement line for "Vendor rebates." I see GAAP guidance that VENDORS should record rebates as a reduction in their sales prices, but how should those of us receiving them record them? Should I offset my COGS by the rebate received, or just show it as its own revenue account?

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Looks like EITF 02-16 is the guidance you are looking for. If I am reading it correctly, it should be a reduction of cost. You will want to read the literature yourself for your specific facts and circumstances. Good luck!

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That does seem to be a very helpful pointer, though I find the language used in EITF 02-16 is challenging to translate into my particular circumstances since I don't consider the amounts involved to be reasonably estimable. If they were, it appears they should simply be reasonably estimated and used to offset my cost of sales. Since they are not reasonably estimable, I'm not so clear on how to handle them since they typically relate to transactions I'd closed 3-9 months ago.

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My practice was always a COGS offset and that practice passed audit muster.

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I agree with Linda. I match it to offset the cost incurred. Since it doesn't represent a product sold or service provided (your source of revenue) I would not record it as such.

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