Audiovox 2003 Annual Report Download - page 88

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AUDIOVOX CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
November 30, 2001, 2002 and 2003
(Dollars in thousands, except share and per share data)
inventory purchase commitments and of trade receivables due in foreign
currencies.
Gains and losses on the forward exchange contracts that qualify as
hedges are reported as a component of the underlying transaction.
Foreign currency transactions which have not been hedged are marked to
market on a current basis with gains and losses recognized through
income and reflected in other income (expense). In addition, any
previously deferred gains and losses on hedges which are terminated
prior to the transaction date are recognized in current income when
the hedge is terminated.
At November 30, 2002 and 2003, the Company had no contracts to
exchange foreign currencies in the form of forward exchange contracts.
For the years ended November 30, 2001, 2002 and 2003, gains and losses
on foreign currency transactions which were not hedged were not
material. For the years ended November 30, 2001, 2002 and 2003, there
were no gains or losses as a result of terminating hedges prior to the
transaction date.
(j) Debt Issuance Costs
Costs incurred in connection with the restructuring of bank
obligations (Note 12) have been capitalized. These charges are
amortized over the lives of the respective agreements. Amortization
expense of these costs amounted to $336, $379 and $528 for the years
ended November 30, 2001, 2002 and 2003, respectively.
(k) Property, Plant and Equipment
Property, plant and equipment are stated at cost. Property under a
capital lease is stated at the present value of minimum lease
payments. Major improvements are capitalized and minor replacements,
maintenance and repairs are charged to expense as incurred. Upon
retirement or disposal of assets, the cost and related accumulated
depreciation are removed from the consolidated balance sheets.
Depreciation is calculated on the straight−line method over the
estimated useful lives of the assets as follows:
Buildings 20−30 years
Furniture, fixtures and displays 5−10 years
Machinery and equipment 5−10 years
Computer hardware and software 3−5 years
Automobiles 3 years
(Continued)
87