Garmin 2001 Annual Report Download - page 41

GARMIN LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Note 2. Summary of Significant Accounting Policies (continued)
Fiscal Year
The Company has adopted a 52–53-week period ending on the last Saturday of the calendar year. Due to the fact that there are
not exactly 52 weeks in a calendar year and there is slightly more than one additional day per year (not including the effects of leap
year) in each calendar year as compared to a 52-week fiscal year, the Company will have a fiscal year comprising 53 weeks in certain
fiscal years, as determined by when the last Saturday of the calendar year occurs.
In those resulting fiscal years that have 53 weeks, the Company will record an extra week of sales, costs, and related financial activity.
Therefore, the financial results of those fiscal years, and the associated 14-week quarter, will not be exactly comparable to the prior
and subsequent 52-week fiscal years and the associated quarters having only 13 weeks. Fiscal 2001 and 1999 include 52 weeks
while fiscal 2000 was comprised of 53 weeks.
Foreign Currency Translation
GARMIN utilizes the New Taiwan Dollar as its functional currency. Prior to 2001, GEL utilized the British pound sterling as its functional
currency. However, as a result of an increase in United States dollar-denominated transactions, GEL changed its functional currency
to the United States dollar effective December 31, 2000. The impact of this change was not material. In accordance with Statement
of Financial Accounting Standards (SFAS) No. 52, Foreign Currency Translation, the financial statements of GARMIN for all periods
presented and GEL for fiscal 2000 and 1999 have been translated into United States dollars, the functional currency of Garmin Ltd.
and GII, and the reporting currency herein, for purposes of consolidation at rates prevailing during the year for sales, costs, and
expenses and at end-of-year rates for all assets and liabilities. The effect of this translation is recorded in a separate component
of stockholders’ equity. Transactions in foreign currencies are recorded at the approximate rate of exchange at the transaction date.
Assets and liabilities resulting from these transactions are translated at the rate of exchange in effect at the balance sheet date.
All differences are recorded in results of operations and amounted to exchange gains (losses) of approximately $11,573, $6,962,
and $(1,469) for the years ended December 29, 2001, December 30, 2000, and December 25, 1999, respectively. These gains (losses)
are included in other income (expense) in the accompanying consolidated statements of income. The gain in fiscal 2001 is the result
of the strengthening of the United States dollar compared to the New Taiwan Dollar in the second and fourth quarters of fiscal
2001 while the gain in fiscal 2000 is principally attributable to the strengthening of the United States dollar compared to the New
Taiwan Dollar in the fourth quarter of fiscal 2000.
Cumulative translation adjustments of $38,427 and $22,908 as of December 29, 2001 and December 30, 2000, respectively, have
been included in accumulated other comprehensive loss in the accompanying consolidated balance sheets.
Earnings Per Share
Basic earnings per share amounts are computed based on the weighted-average number of common shares outstanding. For purposes
of diluted earnings per share, the number of shares that would be issued from the exercise of dilutive stock options has been reduced
by the number of shares which could have been purchased from the proceeds of the exercise at the average market price of the
Company’s stock during the period the options were outstanding. See Note 14.
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