Kimberly-Clark 2015 Annual Report Download - page 41

Intangibleassetswithfinitelivesareamortizedovertheirestimatedusefullivesandarereviewedforimpairmentwhenevereventsorchangesincircumstances
indicate that their carrying amount may not be recoverable. Estimated useful lives range from 2 to20 years for trademarks, 5 to15 years for patents and
developedtechnologies,and5to15yearsforotherintangibleassets.Animpairmentlosswouldbeindicatedwhenestimatedundiscountedfuturecashflowsfrom
theuseoftheassetarelessthanitscarryingamount.Animpairmentlosswouldbemeasuredasthedifferencebetweenthefairvalue(basedondiscountedfuture
cashflows)andthecarryingamountoftheasset.
InvestmentsinEquityCompanies
Investmentsincompanieswhichwedonotcontrolbutoverwhichwehavetheabilitytoexercisesignificantinfluenceandthat,ingeneral,areatleast20percent-
owned by us, are stated at cost plusequity in undistributed net income. These investments are evaluated for impairment when warranted. An impairment loss
wouldberecordedwheneveradeclineinvalueofanequityinvestmentbelowitscarryingamountisdeterminedtobeotherthantemporary.Injudging"otherthan
temporary,"wewouldconsiderthelengthoftimeandextenttowhichthefairvalueoftheequitycompanyinvestmenthasbeenlessthanthecarryingamount,the
near-termandlonger-termoperatingandfinancialprospectsoftheequitycompany,andourlonger-termintentofretainingtheinvestmentintheequitycompany.
RevenueRecognition
Salesrevenueisrecognizedatthetimeofproductshipmentordelivery,dependingonwhentitlepasses,tounaffiliatedcustomers,andwhenallofthefollowing
haveoccurred:afirmsalesagreementisinplace,pricingisfixedordeterminable,andcollectionisreasonablyassured.Salesarereportednetofreturns,consumer
andtradepromotions,rebatesandfreightallowed.Taxesimposedbygovernmentalauthoritiesonourrevenue-producingactivitieswithcustomers,suchassales
taxesandvalue-addedtaxes,areexcludedfromnetsales.
SalesIncentivesandTradePromotionAllowances
The cost of promotion activities provided to customers is classified as a reduction in sales revenue. In addition, the estimated redemption value of consumer
couponsisrecordedatthetimethecouponsareissuedandclassifiedasareductioninsalesrevenue.Rebateandpromotionaccrualsarebasedonestimatesofthe
quantityofcustomersalesandthepromotionaccrualsalsoconsiderestimatesofthenumberofconsumercouponsthatwillberedeemed,timingofpromotional
activitiesandforecastedcostsforactivitieswithinthepromotionalprograms.
AdvertisingExpense
Advertising costs are expensed in the year the related advertisement or campaign is first presented by the media. For interim reporting purposes, advertising
expensesarechargedtooperationsasapercentageofsalesbasedonestimatedsalesandrelatedadvertisingexpenseforthefullyear.
ResearchExpense
Researchanddevelopmentcostsarechargedtoexpenseasincurred.
ForeignCurrencyTranslation
Theincomestatementsofforeignoperations,otherthanthoseinhighlyinflationaryeconomies,aretranslatedintoU.S.dollarsatratesofexchangeineffecteach
month. The balance sheets of these operations are translated at period-end exchange rates, and the differences from historical exchange rates are reflected in
stockholders'equityasunrealizedtranslationadjustments.
DerivativeInstrumentsandHedging
Ourpoliciesallowtheuseofderivativesforriskmanagementpurposesandprohibittheiruseforspeculation.Ourpoliciesalsoprohibittheuseofanyleveraged
derivativeinstrument.Consistentwithourpolicies,foreigncurrencyderivativeinstruments,interestrateswapsandlocks,andthemajorityofcommodityhedging
contractsareenteredintowithmajorfinancialinstitutions.Atinceptionweformallydesignatecertainderivativesascashflow,fairvalueornetinvestmenthedges
andestablishhowtheeffectivenessofthesehedgeswillbeassessedandmeasured.Thisprocesslinksthederivativestothetransactionsorfinancialbalancesthey
arehedging.Changesinthefairvalueofderivativesnotdesignatedashedginginstrumentsarerecordedinearningsastheyoccur.Allderivativeinstrumentsare
recordedas assetsor liabilitiesonthe balancesheet atfair value.Changesinthefair valueof derivativesareeither recordedintheincome statementor other
comprehensive income, as appropriate. The gain or loss on derivatives designated as fair value hedges and the offsetting loss or gain on the hedged item
attributable to the hedged risk are included in income in the period that changes in fair value occur. The effective portion of the gain or loss on derivatives
designated
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37 KIMBERLY-CLARKCORPORATION - 2015 Annual Report