=+(2) sale recognized along with an allowance for estimated returns, and (3) sale recognized with no allowance for estimated returns. SFAS No. 48 mandated revenue recognition for such sales subject to six conditions: (1) price is substantially fixed or deter-

minable at sale date: (2) buyer has paid or is obligated to pay the seller, and payment is not contingent on resale of the product; (3) buyer's obligation would not be changed in the event of theft or physical damage to the prod-

uct; (4) buyer acquiring the product for resale has economic substance apart from the seller; (5) seller has no significant obligations to bring about resale by the buyer: and (6) future returns can be reasonably estimated.

Required:

Discuss the underlying conceptual issues concerning revenue recognition when the right of return exists. Can any (or all) of the pre-SFAS No. 48 methods be justified?