Rayovac 2009 Annual Report Download - page 81

Table of Contents
Index to Financial Statements
occurs. The measurement date provisions of ASC 715, became effective during Fiscal 2009 and we now measure all of our defined benefit pension and
postretirement plan assets and obligations as of September 30 which is our fiscal year end.
See Note 11, Employee Benefit Plans, of Notes to Consolidated Financial Statements included in this Annual Report on Form 10−K for a more
complete discussion of our employee benefit plans.
Restructuring and Related Charges
Restructuring charges are recognized and measured according to the provisions of ASC Topic 420: “Exit or Disposal Cost Obligations,” formerly
SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities” (“ASC 420”). Under ASC 420, restructuring charges include, but are not
limited to, termination and related costs consisting primarily of severance costs and retention bonuses, and contract termination costs consisting primarily of
lease termination costs. Related charges, as defined by us, include, but are not limited to, other costs directly associated with exit and integration activities,
including impairment of property and other assets, departmental costs of full−time incremental integration employees, and any other items related to the exit
or integration activities. Costs for such activities are estimated by us after evaluating detailed analyses of the cost to be incurred. We present restructuring
and related charges on a combined basis.
Liabilities from restructuring and related charges are recorded for estimated costs of facility closures, significant organizational adjustment and
measures undertaken by management to exit certain activities. Costs for such activities are estimated by management after evaluating detailed analyses of
the cost to be incurred. Such liabilities could include amounts for items such as severance costs and related benefits (including settlements of pension plans),
impairment of property and equipment and other current or long term assets, lease termination payments and any other items directly related to the exit
activities. While the actions are carried out as expeditiously as possible, restructuring and related charges are estimates. Changes in estimates resulting in an
increase to or a reversal of a previously recorded liability may be required as management executes a restructuring plan.
We report restructuring and related charges associated with manufacturing and related initiatives in cost of goods sold. Restructuring and related
charges reflected in cost of goods sold include, but are not limited to, termination and related costs associated with manufacturing employees, asset
impairments relating to manufacturing initiatives and other costs directly related to the restructuring initiatives implemented.
We report restructuring and related charges associated with administrative functions in operating expenses, such as initiatives impacting sales,
marketing, distribution or other non−manufacturing related functions. Restructuring and related charges reflected in operating expenses include, but are not
limited to, termination and related costs, any asset impairments relating to the administrative functions and other costs directly related to the initiatives
implemented.
The costs of plans to (i) exit an activity of an acquired company, (ii) involuntarily terminate employees of an acquired company or (iii) relocate
employees of an acquired company are measured and recorded in accordance with the provisions of the ASC Topic: 805 “Business Combinations,”
formerly EITF Issue No. 95−3, “Recognition of Liabilities in Connection with a Purchase Business Combination” (“ASC 805”). Under ASC 805, if certain
conditions are met, such costs are recognized as a liability assumed as of the consummation date of the purchase business combination and included in the
allocation of the acquisition cost. Costs related to terminated activities or employees of the acquired company that do not meet the conditions prescribed in
ASC 805 are treated as restructuring and related charges and expensed as incurred.
See Note 15, Restructuring and Related Charges, of Notes to the Consolidated Financial Statements included in this Annual Report on Form 10−K for
a more complete discussion of our restructuring initiatives and related costs.
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