Revenues are recognized upon passage of title to the customer, typically upon product pick-up, shipment or delivery to customers. Products are delivered to customers primarily through our own long-haul fleet or through a Company owned direct store delivery system. These delivery costs, $5,248 and $6,915 for 2009 and 2008, respectively, are included in selling, general and administrative expenses in the accompanying consolidated financial statements. We record promotional and returns allowances based on recent and historical trends. Revenue is recognized as the net amount estimated to be received after deducting estimated amounts for discounts, trade allowances and product terms. Promotional allowances, including customer incentive and trade promotion activities, are recorded as a reduction to sales based on amounts estimated being due to customers, based primarily on historical utilization and redemption rates. Promotional allowances deducted from sales for fiscal years 2009 and 2008 were $7,147 and $6,909, respectively.
Advertising and other promotional expenses are recorded as selling, general and administrative expenses. Advertising expenses for fiscal years 2009 and 2008 were $3,602 and $3,508, respectively.
We consider all investments with original maturities of three months or less to be cash equivalents. Cash equivalents include money market funds and treasury bills. We had cash equivalents of $13,911 at October 30, 2009 and $6,092 at October 31, 2008.
We routinely classify certain equity securities as available for sale and measure them at market value (fair value). All equity securities were sold in October 2009. Equity securities received from customers as part of bankruptcy settlements are classified as available for sale and deemed Level 1 as described below under “Fair value meansurements”. Changes in unrealized gains or losses are recorded in other comprehensive income as a component of stockholders' equity.
Fair value measurements:
Effective November 1, 2008, we adopted guidance from the Financial Accounting Standards Board (“FASB”). The purpose of this guidance is to define fair value, establish a framework for measuring fair value and enhance disclosures about fair value measurements. The standard describes three levels of inputs that may be used to measure fair value:
The hierarchy noted above requires us to minimize the use of unobservable inputs and to use observable market data, if available, when determining fair value.
Financial assets carried at fair value as of October 30, 2009 are classified below:
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