Revenue and Accounts Receivable

3 Months Ended

Jan. 02, 2021

Revenue and Accounts Receivable [Abstract]

Revenue

3.  Revenue and Accounts Receivable

Our revenues are primarily derived from the sale of plastic packaging products to customers.  Revenue is recognized when performance obligations are satisfied, in an amount reflecting the consideration to which the Company expects to be entitled.  We consider the promise to transfer products to be our sole performance obligation.  If the consideration agreed to in a contract includes a variable amount, we estimate the amount of consideration we expect to be entitled to in exchange for transferring the promised goods to the customer using the most likely amount method.  Our main source of variable consideration is customer rebates.  The accrual for customer rebates was $110 million and $104 million at January 2, 2021 and September 26, 2020, respectively, and is included in Other current liabilities on the Consolidated Balance Sheets.  The Company disaggregates revenue based on reportable business segment, geography, and significant product line.  Refer to Note 10. Segment and Geographic Data for further information.

Accounts Receivable

Accounts receivable, net are presented net of allowance for credit losses of $25 million at January 2, 2021 and September 26, 2020.  The Company records its current expected credit losses based on a variety of factors including historical loss experience, current conditions including the COVID-19 pandemic, and customer financial condition.  The changes to our current expected credit losses, write-off activity, and recoveries were not material for any of the periods presented.

The Company has entered into various qualifying factoring agreements to sell certain receivables to third-party financial institutions. The transfer of receivables is accounted for as a sale, without recourse.  Net sales available under qualifying U.S. based programs were $247 million and $222 million for the quarterly periods ended January 2, 2021 and December 28, 2019, respectively.  There were no amounts outstanding from financial institutions related to these programs.  The fees associated with the transfer of receivables for all programs were not material for any of the periods presented.