revenue recognized is adjusted for variable consideration such as tiered volume discounts and rebates. Revenue recognized is also adjusted based on an estimate of future returns. The Products segment generates revenue through the sale of end user products through retail distribution, independent distributor and dealer networks, the mass retail channel, and the rental channel. These channels primarily serve commercial and residential end users. The sale of products to the various distribution networks represents a single performance obligation. Revenue is recognized at a point in time when the product is shipped as the products are not typically customized for each customer; therefore, there is an alternative use for such inventory. The amount of revenue recognized is adjusted for variable consideration such as tiered volume discounts, rebates, and floor plan interest. Revenue recognized is also adjusted based on an estimate of future returns. Both the Engines and Products segments account for variable consideration and estimated returns according to the same accounting policies. The Company offers a variable discount if certain customers reach established volume goals in the form of tiered volume discounts. The Company applies the expected value approach to estimate the value of the discount which is then applied as a reduction to the transaction price. Included in net sales for the year ended June 30, 2019 were reductions for tiered volume discounts of $12.8 million. The Company offers rebates in the form of promotional allowances to incentivize certain customers to make purchases. The expected value approach is used to estimate the rebate value relative to these allowances which is then applied as a reduction of the transaction price. Included in net sales for the year ended June 30, 2019 were reductions for rebates of $7.7 million. Included in net sales are costs associated with programs under which the Company shares the expense of financing certain dealer and distributor inventories, referred to as floor plan expense. This represents interest for a pre-established length of time based on a variable rate (LIBOR) plus a fixed percentage from a contract with a third party financing source for dealer and distributor inventory purchases. Sharing the cost of these financing arrangements is used by the Company as a marketing incentive for customers to purchase the Company's products to have floor stock for end users to purchase. The Company enters into interest rate swaps to hedge cash flows for a portion of its interest rate risk. The financing costs, net of the related gain or loss on interest rate swaps, are recorded at the time of sale as a reduction of net sales. Included in net sales for the year ended June 30, 2019 were financing costs, net of the related gain or loss on interest rate swaps, of $11.0 million. The Company estimates the expected number of returns based on historical return rates and reduces revenue by the amount of expected returns. The Company requires prepayment on sales in limited circumstances, but the contract liability related to prepayments is immaterial as of June 30, 2019 and represents less than 1% of total sales. The Company offers a standard warranty that is not sold separately on substantially all products that the Company sells which is accounted for as an assurance warranty. Accordingly, no component of the transaction price is allocated to the standard warranty. The Company records a liability for product warranty obligations at the time of sale to a customer based upon historical warranty experience. During year ended June 30, 2019, the Company recorded $4.1 million of bad debt expense related to a trade customer declaring bankruptcy. In the following table, revenue is disaggregated by primary product application. The table also includes a reconciliation of the disaggregated revenue with the reportable segments for the year ended June 30, 2019, as follows (in thousands): Disaggregation of Revenue 51 Year Ended June 30, 2019 Engines Products Eliminations Total Commercial $ 206,992 $ 388,445 $ (23,908 ) $ 571,529 Residential 781,715 543,692 (60,331) 1,265,076 Total $ 988,707 $ 932,137 $ (84,239 ) $ 1,836,605