Plantronics 1999 Annual Report Download - page 16

REVENUE RECOGNITION
Revenue is recognized when products are shipped. Provision is made for estimated potential customer
returns and warranty costs at the time of shipment.
CONCENTRATION OF CREDIT RISK
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally
of cash equivalents and trade receivables.The Company’s cash investment policies limit investments to
those that are short-term and low risk. Concentrations of credit risk with respect to trade receivables are
generally limited due to the large number of customers comprising the Company’s customer base, and
their dispersion across different geographic areas.The Company performs ongoing credit evaluations of its
customers’financial condition and, generally, requires no collateral from its customers.The Company maintains
an allowance for uncollectible accounts receivable based upon expected collectibility of all accounts receivable.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying value of the Company’s financial instruments, including cash, cash equivalents, accounts
receivable, accrued expenses and liabilities, approximate fair value due to their short maturities.
INCOME TAXES
The Company accounts for income taxes under the liability method, which recognizes deferred tax assets
and liabilities for the expected future tax consequences of temporary differences between the tax basis
of assets and liabilities and their financial statement reported amounts.Tax credits are accounted for as
a reduction of tax expense in the year in which the credits reduce taxes payable.
FOREIGN OPERATIONS AND CURRENCY TRANSLATION
The Company has foreign assembly and manufacturing operations in Mexico, light assembly, research and
development and sales and marketing in the United Kingdom, an international finance, customer service
and logistics headquarters in the Netherlands, and sales offices in Canada,Asia, Europe,Australia and South
America. For fiscal 1997, 1998 and 1999, the functional currency of all foreign operations was the US dollar.
Accordingly, gains or losses arising from the translation of foreign currency statements and transactions are
included in determining consolidated results of operations.Aggregate exchange gains (losses) for fiscal 1997,
1998 and 1999 were $0.4 million, ($0.2) million and ($0.2) million, respectively. Gains or losses arising from
the translation of the United Kingdom statements prior to fiscal 1997 were recorded as a separate component
of stockholders’ equity and are presented as accumulated other comprehensive income.
COMPREHENSIVE INCOME
Effective April 1, 1998, the Company adopted Statement of Financial Accounting Standards No. 130,
“Reporting Comprehensive Income” (“SFAS 130”).The statement establishes presentation and disclosure
requirements for reporting comprehensive income. Comprehensive income includes charges or credits to
equity that are not the result of transactions with owners.Total comprehensive income was the same as net
income for all periods presented.
SEGMENT REPORTING
In fiscal 1999, the Company adopted Statement of Financial Accounting Standards No. 131,“Disclosures
About Segments of an Enterprise and Related Information” (“SFAS 131”).The statement requires the Company
to report certain information about operating segments in its annual financial statements. It also establishes
standards for related disclosures about products and services, geographic areas and major customers
(see note 9).
page 14 PLANTRONICS ANNUAL REPORT 1999
Notes to consolidated financial statements