Form 10-K NOBILITY HOMES INC Due: November 06
The Company recognizes proceeds from the sale of repurchased homes upon transfer of ownership to the new purchaser.
The Company recognizes revenue from its independent dealers upon receipt of wholesale floor plan financing or establishment of retail credit approval for terms, shipment of the home and transfer of the title and risk of loss to the Independent Dealer. For wholesale shipments to independent dealers, the Company has no obligation to install the house or perform any other material obligation.
The Company recognizes revenue from its wholly-owned subsidiary, Mountain Financial, Inc., as follows: commission revenue (and fees in lieu of commissions) is recognized on the inception date of the insurance coverage or on the invoice date, whichever is later. Premium commissions charged and collected directly by insurance companies are recognized as revenue when received, which in many cases is the company’s first notification of amounts earned due to lack of information on policies and renewals. Contingent commissions are recognized as revenue when received. Contingent commissions are commissions paid by policyholders and are based on estimated profit and/or overall volume of business placed with the policyholder. The data necessary to calculate contingent commissions cannot reasonably be obtained before the receipt of the commission which, in many cases, is the first notification by the Company of the amounts earned. The Company provides appropriate reserves for policy lapses based on many factors, including past customer transaction history, historical experience and other information, which are periodically evaluated and adjusted as necessary. In the opinion of management, no reserve was deemed necessary for policy cancellations as of November 6, 2021 and October 31, 2020.
Sales of homes to affiliated entities that are subject to conditional payment terms are considered inventory consignment arrangements. Revenue from these arrangements is recognized when the homes are sold to end users and payment is received by the affiliated entity.
See Note 4 “Related party transactions”.
Revenues by products and services
– Revenues per net sales of prefabricated houses,
second hand
the commissions for homes and insurance agents for the years ended November 6, 2021 and October 31, 2020 are as follows:
| 2021 | 2020 | |||||||
|
prefab housing |
$ | $ | ||||||
|
Insurance agent commissions |
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|
Total net sales |
$ | $ | ||||||
Cash and cash equivalents
The Company considers all money market accounts and highly liquid debt securities purchased with an original maturity of three months or less to be cash equivalents.
Accounts receivable fluctuate due to the number of homes sold to independent dealers. The Company recognizes revenue from its independent dealers upon receipt of wholesale floor plan financing or establishment of retail credit approval for terms, shipment of the home and transfer of the title and risk of loss to the Independent Dealer.
2016-01,
unrealized gains and losses on these securities are reflected in the statement of operations and comprehensive income.
The accompanying notes form an integral part of these financial statements.