Henry Schein 2013 Annual Report Download - page 73

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HENRY SCHEIN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)
64
Note 1 – Significant Accounting Policies
Nature of Operations
We distribute health care products and services primarily to office-based health care practitioners with
operations or affiliates in the United States, Australia, Austria, Belgium, Canada, China, the Czech Republic,
France, Germany, Hong Kong SAR, Iceland, Ireland, Israel, Italy, Luxembourg, Mauritius, the Netherlands, New
Zealand, Portugal, Slovakia, South Africa, Spain, Switzerland, Thailand and the United Kingdom.
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 or
investments in unconsolidated affiliates of less than 20% in which we have the ability to influence the operating or
financial decisions, are accounted for under the equity method. See Note 6 for accounting treatment of Redeemable
noncontrolling interests. 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 28, 2013 and December 29, 2012 consisted of 52 weeks and the year ended
December 31, 2011 consisted of 53 weeks.
Revenue Recognition
We generate revenue from the sale of dental, animal health and medical 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 reasonably assured and product returns are reasonably estimable.