Columbia Sportswear 2011 Annual Report Download - page 54

COLUMBIA SPORTSWEAR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Accounts receivable:
Accounts receivable have been reduced by an allowance for doubtful accounts. The Company makes
ongoing estimates of the collectability of accounts receivable and maintains an allowance for estimated losses
resulting from the inability of the Company’s customers to make required payments.
Inventories:
Inventories are carried at the lower of cost or market. Cost is determined using the first-in, first-out method.
The Company periodically reviews its inventories for excess, close-out or slow moving items and makes
provisions as necessary to properly reflect inventory value.
Property, plant, and equipment:
Property, plant and equipment are stated at cost, net of accumulated depreciation. Depreciation is provided
using the straight-line method over the estimated useful lives of the assets. The principal estimated useful lives
are: buildings and building improvements, 15-30 years; land improvements, 15 years; furniture and fixtures, 3-10
years; and machinery and equipment, 3-5 years. Leasehold improvements are depreciated over the lesser of the
estimated useful life of the improvement, which is most commonly 7 years, or the remaining term of the
underlying lease.
Improvements to property, plant and equipment that substantially extend the useful life of the asset are
capitalized. Repair and maintenance costs are expensed as incurred. Internal and external costs directly related to
the development of internal-use software during the application development stage, including costs incurred for
third party contractors and employee compensation, are capitalized and depreciated over a 3-7 year estimated
useful life.
Impairment of long-lived assets:
Long-lived assets are amortized over their useful lives and are measured for impairment only when events
or circumstances indicate the carrying value may be impaired. In these cases, the Company estimates the future
undiscounted cash flows to be derived from the asset or asset group to determine whether a potential impairment
exists. When reviewing for retail store impairment, identifiable cash flows are measured at the individual store
level. If the sum of the estimated undiscounted cash flows is less than the carrying value of the asset, the
Company recognizes an impairment loss, measured as the amount by which the carrying value exceeds the
estimated fair value of the asset. Impairment charges for long-lived assets are included in selling, general and
administrative (“SG&A”) expense and were $6,211,000, $3,003,000 and $1,542,000 for the years ended
December 31, 2011, 2010 and 2009, respectively.
Intangible assets and goodwill:
Goodwill and intangible assets with indefinite useful lives are not amortized but are periodically evaluated
for impairment. Intangible assets that are determined to have finite lives are amortized using the straight-line
method over their useful lives and are measured for impairment only when events or circumstances indicate the
carrying value may be impaired.
Impairment of goodwill and intangible assets:
The Company reviews and tests its goodwill and intangible assets with indefinite useful lives for
impairment in the fourth quarter of each year and when events or changes in circumstances indicate that the
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