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Richardson Denies Revenue Recognition Policy Change Despite New Language

Electronic equipment maker suggests new language shouldn’t be construed as adopting more aggressive revenue recognition policy.

October 11, 2024

Richardson Electronics (RELL), a provider of engineered solutions, power grid and microwave tube consumables, says there has been no change in its revenue recognition policy despite inserting new language that appears to us to suggest the company has adopted a more aggressive revenue recognition policy.

Richardson’s latest quarterly filing included new language that did not appear in its last annual report filed just two months prior:

“Revenue is recognized when control transfers since it is not always based on delivery of the goods.”

After DuDil asked the company whether the new language constituted a change in policy and, if so, what impact the change had on sales in the latest quarter, Richardson’s representatives told us:

“There have been no changes in RELL’s policy, but rather a more detailed description.”

Richardson did not tell DuDil when exactly the company determined the new language was necessary or why.

When DuDil requested the company quantify revenue recognized by delivery vs. transfer of control and the change year-over-year, Richardson declined:

“RELL does not provide this level of detail. But directionally, the amount of transfer of control revenue in Q1FY25 was immaterial.”

Notably, Richardson’s Chairman and Chief Executive Officer Edward J. Richardson’s annual cash bonus is based, in part, on revenue growth.

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