Ingram Micro 2008 Annual Report Download - page 58

Download and view the complete annual report

Please find page 58 of the 2008 Ingram Micro 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 100

  • 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
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100

INGRAM MICRO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in 000s, except share and per share data)
Note 1 — Organization and Basis of Presentation
Ingram Micro Inc. (“Ingram Micro”) and its subsidiaries are primarily engaged in the distribution of
information technology (“IT”) products and supply chain solutions worldwide. Ingram Micro operates in North
America, Europe, Middle East and Africa (“EMEA”), Asia-Pacific and Latin America.
Note 2 — Significant Accounting Policies
Basis of Consolidation
The consolidated financial statements include the accounts of Ingram Micro and its subsidiaries (collectively
referred to herein as the “Company”). 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 “2008,” “2007” and “2006” represent the 53- or 52-week fiscal years ended January 3, 2009
(53-weeks), December 29, 2007 (52-weeks) and December 30, 2006 (52-weeks), respectively.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the
United States of America (“U.S.”) requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, 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 the
realizable value of accounts receivable, vendor programs, inventories, goodwill, intangible and other long-lived
assets, income taxes and contingencies and litigation. Actual results could differ from these estimates.
Revenue Recognition
Revenue is recognized when: an arrangement exists; delivery has occurred, including transfer of title and risk
of loss for product sales, or services have been rendered for service revenues; the price to the buyer is fixed or
determinable; and collectibility is reasonably assured. Service revenues have represented less than 10% of total net
sales for 2008, 2007 and 2006. 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. The net
impact on gross margin from estimated sales returns is included in allowances against trade accounts receivable in
the consolidated balance sheet. The Company also has limited contractual relationships with certain ofits customers
and suppliers whereby the Company assumes an agency relationship in the transaction as defined by EITF 99-19,
“Reporting Revenue Gross as a Principal versus Net as an Agent.” In such arrangements, the Company recognizes
the net fee associated with serving as an agent in sales.
Vendor Programs
Funds received from vendors for price protection, product rebates, marketing/promotion, infrastructure reim-
bursement and meet-competition programs are recorded as adjustments to product costs, revenue, or selling, general
and administrative expenses according to the nature of the program. Some of these programs may extend over one or
more quarterly reporting periods. The Company accrues rebates or other vendor incentives as earned based on sales of
qualifying products or as services are provided in accordance with the terms of the related program.
48