Columbia Sportswear 2011 Annual Report Download - page 53

COLUMBIA SPORTSWEAR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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, including sales returns and claims from customers, allowance for doubtful accounts, excess,
slow-moving and close-out inventories, 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 90 days or less at the date of acquisition. At December 31, 2011, cash and cash
equivalents consisted of cash, money market funds and time deposits with original maturities ranging from
overnight to less than 90 days. At December 31, 2010, cash and cash equivalents consisted of cash, money
market funds, municipal bonds and time deposits with original maturities ranging from overnight to less than 90
days.
Investments:
At December 31, 2011, short-term investments consisted of time deposits with original maturities greater
than 90 days. These investments are considered available for use in current operations. 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. 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, 2011 and 2010, long-term investments included in other non-current assets 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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