Columbia Sportswear 2010 Annual Report Download - page 53

COLUMBIA SPORTSWEAR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1—BASIS OF PRESENTATION AND ORGANIZATION
Nature of the business:
Columbia Sportswear Company is a global leader in the design, development, marketing and distribution of
active outdoor apparel, footwear, accessories and equipment.
Principles of consolidation:
The consolidated financial statements include the accounts of Columbia Sportswear Company and its
wholly-owned subsidiaries (the “Company”). All significant intercompany balances and transactions have been
eliminated in consolidation.
Estimates and assumptions:
The preparation of financial statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated
financial statements and the reported amounts of revenues and expenses during the reporting period. Actual
results may differ from these estimates and assumptions. Some of these more significant estimates relate to
revenue recognition, allowance for doubtful accounts, inventory obsolescence, product warranty, long-lived and
intangible assets, income taxes and stock-based compensation.
NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and cash equivalents:
Cash and cash equivalents are stated at fair value or at cost, which approximates fair value, and include
investments with maturities of three months or less at the date of acquisition. At December 31, 2010, cash and
cash equivalents consisted of money market funds, municipal bonds and time deposits with original maturities
ranging from overnight to less than 90 days. At December 31, 2009, cash and cash equivalents consisted of
money market funds and time deposits with maturities ranging from overnight to less than 90 days.
Investments:
At December 31, 2010, short-term investments consisted of shares in a short-term municipal bond fund and
municipal bonds with original maturities greater than 90 days. These investments are considered available for use
in current operations. At December 31, 2009, short-term investments consisted of shares in a short-term bond
fund available for use in current operations and time deposits with maturities of six months or less. All short-term
investments are classified as available-for-sale securities and are recorded at fair value with any unrealized gains
and losses reported, net of tax, in other comprehensive income. Realized gains or losses are determined based on
the specific identification method.
At December 31, 2010 and 2009, long-term investments consisted of mutual fund shares held to offset
liabilities to participants in the Company’s deferred compensation plan. The investments are classified as long-
term because the related deferred compensation liabilities are not expected to be paid within the next year. These
investments are classified as trading securities and are recorded at fair value with unrealized gains and losses
reported in operating expenses, which are offset against gains and losses resulting from changes in corresponding
deferred compensation liabilities to participants.
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