Avon 2006 Annual Report Download - page 84

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SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
Years ended December 31, 2006, 2005 and 2004
(In millions)
Description
Balance
at
Beginning
of Period
Additions
Deductions
Balance
at End
of
Period
Charged
to Costs
and
Expenses
Charged
to
Revenue
2006
Allowance for doubtful accounts receivable $ 85.8 $144.7 $ – $139.4(1) $ 91.1
Allowance for sales returns 24.3 – 295.0 291.3(2) 28.0
Allowance for inventory obsolescence 82.4 173.3 – 130.7(3) 125.0
Deferred tax asset valuation allowance 145.2 88.9(4) – 234.1
2005
Allowance for doubtful accounts receivable $ 77.6 $135.6 $ – $127.4(1) $ 85.8
Allowance for sales returns 23.4 – 288.5 287.6(2) 24.3
Allowance for inventory obsolescence 57.0 83.9 – 58.5(3) 82.4
Deferred tax asset valuation allowance 70.2 75.0(4) – – 145.2
2004
Allowance for doubtful accounts receivable $ 61.6 $140.0 $ – $124.0(1) $ 77.6
Allowance for sales returns 19.5 – 285.1 281.2(2) 23.4
Allowance for inventory obsolescence 44.6 76.7 – 64.3(3) 57.0
Deferred tax asset valuation allowance 84.8 – – 14.6(5) 70.2
(1) Accounts written off, net of recoveries and foreign currency translation adjustment.
(2) Returned product destroyed and foreign currency translation adjustment.
(3) Obsolete inventory destroyed and foreign currency translation adjustment.
(4) Increase in valuation allowance for tax loss and tax credit carryforward benefits is because it is more likely than not that some or all of the deferred tax assets
will not be utilized in the future.
(5) Decrease in valuation allowance primarily due to a decrease in foreign tax credit carryforwards for which a valuation allowance had been provided.