Garmin 2002 Annual Report Download - page 49

Download and view the complete annual report

Please find page 49 of the 2002 Garmin annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 76

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76

Note 2. Summary of Significant Accounting Policies (continued)
Use of Estimates
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United
States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial
statements and accompanying notes. Actual results could differ from those estimates.
Concentration of Credit Risk
The Company grants credit to certain customers who meet the Company’s pre-established credit requirements. Generally, the
Company does not require security when trade credit is granted to customers. Credit losses are provided for in the Company’s
consolidated financial statements and consistently have been within management’s expectations.
Revenue Recognition
The Company recognizes revenue from product sales when the product is shipped to the customer and title has transferred. The
Company assumes no remaining significant obligations associated with the product sale other than that related to its warranty
programs discussed below.
Shipping and Handling Costs
Shipping and handling costs are included in cost of goods sold in the accompanying consolidated financial statements.
Product Warranty
The Company provides for estimated warranty costs at the time of sale. The warranty period is generally for one year from date
of shipment with the exception of certain aviation products for which the warranty period is two years from the date of
installation.
Sales Programs
The Company provides certain monthly and quarterly incentives for its dealers based on various factors including dealer
purchasing volume and growth. Additionally, the Company provides rebates to end users on certain products. Estimated rebates
and incentives payable to distributors are regularly reviewed and recorded as accrued expenses on a monthly basis. These rebates
and incentives are recorded as reductions to net sales in the accompanying consolidated statements of income.
Advertising Costs
The Company expenses advertising costs as incurred. Advertising expense charged to operations amounted to approximately
$16,670, $14,714, and $11,529 for the years ended December 28, 2002, December 29, 2001, and December 30, 2000, respectively.
Research and Development
Substantially all research and development is performed by GII in the United States. Research and development costs, which are
expensed as incurred, amounted to approximately $32,163, $28,164, and $21,764, for the years ended December 28, 2002,
December 29, 2001, and December 30, 2000, respectively.
48