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  "docSlug": "886ebab3088d",
  "documentTitle": "Herbalife, Ltd. (HLF)",
  "authorId": "01_Pershing_Square",
  "authorName": "William Ackman",
  "documentKindSlug": "activist-deck",
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  "presentationDate": "2012-12-20 00:00:00",
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  "notes": "The slide highlights accounting practices in the MLM industry to support a broader argument about revenue recognition.",
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      "kind": "callout",
      "text": "Other MLMs account for Wholesale Commissions as operating expenses",
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      "kind": "paragraph",
      "text": "“Revenue Recognition The Company receives payment by credit card, personal check, or guaranteed funds for orders from independent distributors and makes related commission payments in the following month. Net sales reflect product sales less the distributor discount of 20 percent to 40 percent of the suggested retail price. Sales revenue and commission expenses are recorded when the merchandise is shipped, as this is the point title and risk of loss pass. In accordance with EITF 01-09, the Company presents distributor royalty and commission expense as an operating expense, rather than a reduction to net sales, as these payments are not made to the purchasing distributor.”",
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      "kind": "quote",
      "text": "– Reliv International, Inc. Annual Report (2007)",
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      "kind": "quote",
      "text": "\"In accordance with EITF 01-09, the Company presents distributor royalty and commission expense as an operating expense, rather than a reduction to net sales, as these payments are not made to the purchasing distributor.\" — Reliv International, Inc. Annual Report (2007)",
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      "kind": "title",
      "text": "Wholesale Commissions ≠ Retail Profit (cont'd)",
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