Channel stuffing
Definition
Oversupplying distributors or retailers with inventory accompanied by side agreements that neutralise the economic risk of the transfer, such as guaranteed return rights or extended, contingent payment terms.
Related terms
- Bill-and-hold
- An arrangement where title passes and revenue is recorded even though the seller retains physical possession of the goods at the buyer's...
- Days Sales Outstanding (DSO)
- Accounts receivable divided by average daily revenue. A rising DSO alongside growing reported revenue is a classic early indicator that booked sales...
- Fictitious revenue
- Revenue recorded for a transaction that did not occur at all, or that involved a related party cycling funds to simulate customer...
- Performance obligation
- Under IFRS 15 and ASC 606, the distinct promise to transfer a good or service to a customer. Revenue can only be...
- Premature revenue recognition
- Recording revenue in an earlier period than the standards permit, typically by treating an uncompleted performance obligation as satisfied. The transaction is...
Explained in
- Revenue Recognition FraudOversupplying distributors or retailers with inventory accompanied by side agreements that neutralise the economic risk of the transfer, such as guaranteed ret...