1. Certain companies provide services to their customers that require the customers to purchase equipment in order to utilize those services. The equipment required is often manufactured and distributed by third parties and sold to end-customers through resellers without the direct involvement of the service provider. Accordingly, a service provider may provide certain incentives to a third-party manufacturer or reseller to reduce the selling price of the equipment in order to stimulate end-customer demand and, inherently, increase the demand for the service provider’s service. 2. Issue 01-9 provides guidance on the accounting for consideration given by a vendor to a customer. While some diversity exists, the incentives given by a service provider to a third-party manufacturer or reseller that ultimately benefits a service provider’s customer have generally been considered outside the scope of Issue 01-9 because the third-party manufacturers and resellers are believed to be outside of the service provider’s distribution chain. Copyright © 2006, Financial Accounting Standards Board Not for redistributio
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