Rayovac 2013 Annual Report Download - page 96

SPECTRUM BRANDS HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)
(Amounts in thousands, except per share figures)
(g) Displays and Fixtures
Temporary displays are generally disposable cardboard displays shipped to customers to facilitate display of the
Company’s products. Temporary displays are generally disposed of after a single use by the customer.
Permanent fixtures are more lasting in nature, are generally made from wire or other longer-lived materials,
and are shipped to customers for use in displaying the Company’s products. These permanent fixtures are
restocked with the Company’s product multiple times over the fixture’s useful life.
The costs of both temporary and permanent displays are capitalized as a prepaid asset until shipped to the
customer and are included in Prepaid expenses and other in the accompanying Consolidated Statements of
Financial Position. The costs of temporary displays are expensed in the period in which they are shipped to
customers and the costs of permanent fixtures are amortized over an estimated useful life of one to two years
from the date they are shipped to customers. The unamortized cost of permanent fixtures is reflected in Deferred
charges and other in the accompanying Consolidated Statements of Financial Position.
(h) Inventories
The Company’s inventories are valued at the lower of cost or net realizable value. Cost of inventories is
determined using the first-in, first-out (FIFO) method.
(i) Property, Plant and Equipment
Property, plant and equipment are recorded at cost or at fair value if acquired in a purchase business combination.
Depreciation on plant and equipment is calculated on the straight-line method over the estimated useful lives of
the assets. Depreciable lives by major classification are as follows:
Building and improvements ........................................ 20-40 years
Machinery, equipment and other .................................... 2-15 years
Plant and equipment held under capital leases are amortized on a straight-line basis over the shorter of the
lease term or estimated useful life of the asset; such amortization is included in depreciation expense.
The Company reviews long-lived assets for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. The Company evaluates recoverability of
assets to be held and used by comparing the carrying amount of an asset to future net cash flows expected to be
generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured
by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be
disposed of are reported at the lower of the carrying amount or fair value less costs to sell.
(j) Intangible Assets
Intangible assets are recorded at cost or at fair value if acquired in a purchase business combination. In
connection with fresh-start reporting, Intangible Assets were recorded at their estimated fair value on August 30,
2009. Customer lists, proprietary technology and certain trade name intangibles are amortized, using the straight-
line method, over their estimated useful lives of up to 20 years. Excess of cost over fair value of net assets
acquired (goodwill) and indefinite-lived intangible assets (certain trade name intangibles) are not amortized.
Goodwill is tested for impairment at least annually, at the reporting unit level with such groupings being
consistent with the Company’s reportable segments. If impairment is indicated, a write-down to fair value
(normally measured by discounting estimated future cash flows) is recorded. Indefinite-lived trade name
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