Ingram Micro 2000 Annual Report Download - page 41

.3 4 |INGRAM MICRO
N o t e 1 — O r g a n i z at i o n a n d b a s i s o f p r e s e n t at i o n
Ingram Micro Inc. (the “Company” or “Ingram Micro”) is primarily engaged, directly and through its wholly- and majority-
owned subsidiari e s , in distri bution of inform ation technology products and services wo r l dw i d e.The Company conducts the majori t y
of its operations in the United States, Europe, Canada,Latin America and Asia Pacific.
N o t e 2 — S i g n i f i c a n t a c c o u n t i n g p o l i c i e s
Basis of consolidation
The consolidated financial statements include the accounts of the Company and its wholly- and majority-owned subsidiaries.
All significant intercompany accounts and transactions have been eliminated in consolidation.
Fiscal year
The fiscal year of the Company is a 52- or 53-week period ending on the Saturday nearest to December 31.All references
herein to “2000,” “1999,” and “1998” represent the 52-week fiscal years ended December 30, 2000, January 1, 2000, and January 2,
1999, respectively.
Use of estimates
Preparation of financial statements in conformity with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities,and disclosure of contingent assets and liabilities
at the financial statement date, and reported amounts of revenue and expenses during the reporting period. Significant estimates
primarily relate to reserves for inventory, vendor programs and credit losses on accounts receivable. Actual results could differ from
these estimates.
Revenue recognition
In December 1999, the Securities and Exchange Commission (the “SEC”) issued Staff Accounting Bulletin No. 101 (“SAB
101”). SAB 101 summarizes the SEC’s views in applying generally accepted accounting principles to revenue recognition.The
adoption of SAB 101 had no material impact on the Company’s financial position or results of operations.
Revenue on products shipped is recognized when the risks and rights of ownership are substantially passed to the customer.
Service revenues are recognized upon delivery of the services.The Company, under specific conditions, permits its customers to
return or exchange products.The provision for estimated sales returns is recorded concurrently with the recognition of revenue.
Vendor programs
Funds re c e i ved from ve n d o rs for price pro t e c t i o n ,p roduct re b at e s , m a r k eting or training pro grams are recorded net of dire c t
costs as adjustments to product costs; s e l l i n g, general and administrat i ve expenses; or revenue according to the nat u re of the pro gr a m .
The Company generated approx i m at e ly 42% of its net sales in fiscal 2000, 39% in 1999, and 40% in 1998 from products
p u r chased from three ve n d o rs.
Warranties
The Company’s suppliers generally warrant the products distributed by the Company and allow returns of defective products,
including those that have been returned to the Company by its customers.The Company does not independently warrant the prod-
ucts it distributes; however, the Company does warrant the following:(1) its services with regard to products that it configures for
its customers,and (2) products that it builds to order from components purchased from other sources. Provision for estimated
warranty costs is recorded at the time of sale and periodically adjusted to reflect actual experience.Warranty expense was not
material to the Company’s consolidated statement of income.
N o tes to co n s o l i d ated financial st at e m e nt s
Dollars in 000s,except per share data