Plantronics 2008 Annual Report Download - page 50

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44
Less than 1-3 3-5 More than
(in thousands) Total 1 year years years 5 years
Operating leases $ 16,317 $ 5,166 $ 7,913 $ 2,883 $ 355
Unconditional purchase obligations 110,687 110,687 - - -
Total contractual cash obligations $ 127,004 $ 115,853 $ 7,913 $ 2,883 $ 355
Payments Due by Period
Effective April 1, 2007, we adopted the provisions of FIN 48. As of March 31, 2008, the liabilities for uncertain tax positions and
related interest were $12.4 million and $1.7 million, respectively. We do not anticipate material cash payments to be made within the
next twelve months associated with our uncertain tax positions.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Management’s discussion and analysis of financial condition and results of operations are based upon Plantronics’ consolidated
financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of
America. The preparation of these financial statements requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the reporting period. On an ongoing basis, we base estimates and judgments on historical experience and on various other
factors that Plantronics’ management believes to be reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities. Management believes the following critical accounting policies,
among others, affect its more significant judgments and estimates used in the preparation of its consolidated financial statements.
Actual results may differ from those estimates under different assumptions or conditions.
We believe our most critical accounting policies and estimates include the following:
· Revenue Recognition
· Investments
· Allowance for Doubtful Accounts
· Excess and Obsolete Inventory
· Warranty
· Goodwill and Intangibles
· Income Taxes
· Stock-Based Compensation Expense
Revenue Recognition
Revenue from sales of products to customers is recognized when the following criteria have been met:
· title and risk of ownership are transferred to customers;
· persuasive evidence of an arrangement exists;
· the price to the buyer is fixed or determinable; and
· collection is reasonably assured.
We recognize revenue net of estimated product returns and expected payments to resellers for customer programs including
cooperative advertising, marketing development funds, volume rebates, and special pricing programs.
Estimated product returns are deducted from revenues upon shipment, based on historical return rates, assumptions regarding the rate
of sell-through to end users from our various channels based on historical sell-through rates and other relevant factors. Such estimates
may need to be revised and could have an adverse impact on revenues if product lives vary significantly from management estimates,
a particular selling channel experiences a higher than estimated return rate, or sell-through rates are slower causing inventory build-up.
Co-op advertising and marketing development funds are accounted for in accordance with EITF Issue No. 01-09, “Accounting for
Consideration Given by a Vendor to a Customer or a Reseller of the Vendor’s Products”. Under these guidelines, we accrue for these
funds as marketing expense if we receive a separately identifiable benefit in exchange and can reasonably estimate the fair value of the
identifiable benefit received; otherwise, the amount is recorded as a reduction to revenues.