Rayovac 2013 Annual Report Download - page 94

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SPECTRUM BRANDS HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)
(Amounts in thousands, except per share figures)
(2) Significant Accounting Policies and Practices
(a) Principles of Consolidation and Fiscal Year End
The consolidated financial statements include the financial statements of SB Holdings and its majority owned
subsidiaries and have been prepared in accordance with U.S. Generally Accepted Accounting Principles
(“GAAP”). All intercompany transactions have been eliminated. The Company’s fiscal year ends September 30.
References herein to Fiscal 2013, Fiscal 2012 and Fiscal 2011 refer to the fiscal years ended September 30, 2013,
2012 and 2011, respectively.
(b) Change in Accounting Principle
During Fiscal 2013, the Company made a change in accounting principle to present tax withholdings for share-
based payment awards paid to taxing authorities on behalf of employees as a financing activity within the
Consolidated Statements of Cash Flows. Such amounts were previously presented within operating activities.
The Company believes this change is preferable as the predominant characteristic of the transaction is a financing
activity. The Company has reclassified the following amounts within its previously reported Consolidated
Statements of Cash Flows on a retrospective basis to reflect this change in accounting principle:
Fiscal 2012 Fiscal 2011
Net cash used by operating activities—Accounts payable and accrued liabilities:
As previously reported ................................................. $1,424 $(60,505)
Reclassification of share based award tax withholding payments ................ 3,936 2,482
As reclassified ........................................................ $5,360 $(58,023)
Net cash used by financing activities—Share based award tax withholding payments:
As previously reported ................................................. $ — $ —
Reclassification of share based award tax withholding payments ................ (3,936) (2,482)
As reclassified ........................................................ $(3,936) $ (2,482)
(c) Revenue Recognition
The Company recognizes revenue from product sales generally upon delivery to the customer at the shipping
point in situations where the customer picks up the product or where delivery terms so stipulate. This represents
the point at which title and all risks and rewards of ownership of the product are passed, provided that: there are
no uncertainties regarding customer acceptance; there is persuasive evidence that an arrangement exists; the price
to the buyer is fixed or determinable; and collectibility is deemed reasonably assured. The Company is generally
not obligated to allow for, and its general policy is not to accept, product returns for battery sales. The Company
does accept returns in specific instances related to its shaving, grooming, personal care, home and garden, small
appliances and pet products. The provision for customer returns is based on historical sales and returns and other
relevant information. The Company estimates and accrues the cost of returns, which are treated as a reduction of
Net sales.
The Company enters into various promotional arrangements, primarily with retail customers, including
arrangements entitling such retailers to cash rebates from the Company based on the level of their purchases,
which require the Company to estimate and accrue the estimated costs of the promotional programs. These costs
are treated as a reduction of Net sales.
The Company also enters into promotional arrangements that target the ultimate consumer. The costs
associated with such arrangements are treated as either a reduction in Net sales or an increase in Cost of goods
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