Audiovox 2003 Annual Report Download - page 94

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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)
The following table provides the changes in the Company's product
warranties and product repair costs for 2002 and 2003:
2002 2003
−−−−−−−− −−−−−−−−
Beginning balance $ 13,066 $ 15,410
Liabilities accrued for warranties issued during
the period 6,985 12,015
Warranty claims paid during the period (4,641) (8,913)
−−−−−−−− −−−−−−−−
Ending balance $ 15,410 $ 18,512
======== ========
(q) Foreign Currency
With the exception of a subsidiary operating in Venezuela, which
was deemed a hyper−inflationary economy in fiscal 2001, assets
and liabilities of those subsidiaries and equity investees
located outside the United States whose cash flows are primarily
in local currencies have been translated at rates of exchange at
the end of the period or historical exchange rates, as
appropriate in accordance with SFAS No. 52, "Foreign Currency
Translation". Revenues and expenses have been translated at the
weighted average rates of exchange in effect during the period.
Gains and losses resulting from translation are recorded in the
cumulative foreign currency translation account in accumulated
other comprehensive income (loss). For the operation in
Venezuela, financial statements are translated at either current
or historical exchange rates, as appropriate. These adjustments,
along with gains and losses on currency transactions, are
reflected in the consolidated statements of operations for fiscal
2001. During the first quarter of fiscal 2002 (January 1, 2002),
Venezuela ceased to be deemed a hyper− inflationary economy.
Exchange gains and losses on intercompany balances of a long−term
nature are also recorded in the cumulative foreign currency
translation account in accumulated other comprehensive income
(loss). Foreign currency transaction gains (losses) of $200, $418
and $(232) for the years ended November 30, 2001, 2002 and 2003,
respectively, were included in other income (expense).
(r) Income Taxes
Income taxes are accounted for under the asset and liability
method. Deferred tax assets and liabilities are recognized for
the future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets and
(Continued)
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