Garmin 2002 Annual Report Download - page 46

GARMIN LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In Thousands, Except Share and Per Share Information)
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 2002 and 2001 included
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 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. Cumulative translation adjustments of $35,971 and $38,427 as of
December 28, 2002 and December 29, 2001, respectively, have been included in accumulated other comprehensive loss in the
accompanying consolidated balance sheets.
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 of approximately $11, $11,573, and $6,962 for the years
ended December 28, 2002, December 29, 2001, and December 30, 2000, respectively. The gain in fiscal 2002 is not material due to
insignificant changes in the exchange rates during the year. 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. These gains are included in other income in the accompanying consolidated statements of income.
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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