Henry Schein 2009 Annual Report Download - page 69

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HENRY SCHEIN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
57
Note 1 – Significant Accounting Policies
Nature of Operations
We distribute healthcare products and services primarily to office-based healthcare practitioners in
the combined North American and European markets, with operations in the United States, Australia,
Austria, Belgium, Canada, China, the Czech Republic, France, Germany, Hong Kong SAR, Ireland,
Israel, Italy, Luxembourg, the Netherlands, New Zealand, Portugal, Spain, Switzerland and the United
Kingdom. We also have affiliates in Iceland, Saudi Arabia and the United Arab Emirates.
Principles of Consolidation
Our consolidated financial statements include the accounts of Henry Schein, Inc. and all of our
controlled subsidiaries. All intercompany accounts and transactions are eliminated in consolidation.
Investments in unconsolidated affiliates, which are greater than or equal to 20% and less than or equal to
50% owned, are accounted for under the equity method. Certain prior period amounts have been
reclassified to conform to the current period presentation.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted
in the United States requires us to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
Fiscal Year
We report our results of operations and cash flows on a 52-53 week basis ending on the last Saturday
of December. The years ended December 26, 2009, December 27, 2008 and December 29, 2007
consisted of 52 weeks.
Revenue Recognition
We generate revenue from the sale of dental, medical and animal health consumable products, as well
as equipment, software products and services and other sources. Provisions for discounts, rebates to
customers, customer returns and other contra-revenue adjustments are recorded based upon historical data
and estimates and are provided for in the period in which the related sales are recognized.
Revenue derived from the sale of consumable products is recognized when products are shipped to
customers. Such sales typically entail high-volume, low-dollar orders shipped using third-party common
carriers. We believe that the shipment date is the most appropriate point in time indicating the completion
of the earnings process because we have no post-shipment obligations, the product price is fixed and
determinable, collection of the resulting receivable is probable and product returns are reasonably
estimable.