Hasbro 2008 Annual Report Download - page 55

HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Thousands of Dollars and Shares Except Per Share Data)
(1) Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of Hasbro, Inc. and all majority-owned
subsidiaries (“Hasbro” or the “Company”). Investments representing 20% to 50% ownership interest in other
companies are accounted for using the equity method. The Company had no equity method investments at
December 28, 2008 that were material to the consolidated financial statements. All significant intercompany
balances and transactions have been eliminated.
Preparation of Financial Statements
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 amounts
reported in the financial statements and notes thereto. Actual results could differ from those estimates.
Reclassifications
Certain amounts in the 2007 and 2006 consolidated financial statements have been reclassified to conform
to the 2008 presentation.
Fiscal Year
Hasbro’s fiscal year ends on the last Sunday in December. The fiscal years ended December 28, 2008 and
December 30, 2007 were fifty-two week periods while the fiscal year ended December 31, 2006 was a fifty-
three week period.
Cash and Cash Equivalents
Cash and cash equivalents include all cash balances and highly liquid investments purchased with a
maturity to the Company of three months or less.
Marketable Securities
Marketable securities are comprised of investments in publicly-traded securities, classified as availa-
ble-for-sale, and are recorded at fair value with unrealized gains or losses, net of tax, reported as a component
of accumulated other comprehensive earnings (“AOCE”) within shareholders’ equity until realized. Unrealized
losses are evaluated to determine the nature of the losses. If the losses are determined to be other than
temporary, the basis of the security is adjusted and the loss is recognized in earnings at that time. These
securities are included in other assets in the accompanying consolidated balance sheets.
Accounts Receivable and Allowance for Doubtful Accounts
Credit is granted to customers predominantly on an unsecured basis. Credit limits and payment terms are
established based on extensive evaluations made on an ongoing basis throughout the fiscal year with regard to
the financial performance, cash generation, financing availability and liquidity status of each customer. The
majority of customers are formally reviewed at least annually; more frequent reviews are performed based on
the customer’s financial condition and the level of credit being extended. For customers on credit who are
experiencing financial difficulties, management performs additional financial analyses before shipping orders.
The Company uses a variety of financial transactions based on availability and cost, to increase the
collectibility of certain of its accounts, including letters of credit, credit insurance, factoring with unrelated
third parties, and requiring cash in advance of shipping.
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