Rayovac 2015 Annual Report Download - page 114

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SPECTRUM BRANDS HOLDINGS, INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)
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 administrative components of the restructuring initiatives implemented. See Note 4,
“Restructuring and Related Charges” for further detail.
Acquisition and Integration Related Charges
Acquisition and integration related charges include, but are not limited to, transaction costs such as banking,
legal, accounting and other professional fees directly related to both consummated acquisitions and acquisition
targets, termination and related costs for transitional and certain other employees, integration related professional
fees and other post business combination expenses associated with integration activity. See Note 3,
“Acquisitions” for further detail.
Income Taxes
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit
carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that
includes the enactment date.
The Company recognizes the effect of income tax positions only if those positions are more likely than not
of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50%
likely of being realized. Changes in recognition or measurement are reflected in income tax expense in the period
in which the change in judgment occurs. Accrued interest expense and penalties related to uncertain tax positions
are recorded in Income tax expense.
See Note 13, “Income Taxes” for further detail.
Foreign Currency Translation
Local currencies are considered the functional currencies for most of the Company’s operations outside the
United States. Assets and liabilities of the Company’s foreign subsidiaries are translated at the rate of exchange
existing at year-end, with revenues, expenses and cash flows translated at the average of the monthly exchange
rates. Adjustments resulting from translation of the financial statements are recorded as a component of
Accumulated other comprehensive income (loss) (“AOCI”). Also included in AOCI are the effects of exchange
rate changes on intercompany balances of a long-term investment nature. See Note 16, “Accumulated Other
Comprehensive Income” for further detail.
Foreign currency transaction gains and losses related to assets and liabilities that are denominated in a
currency other than the functional currency are reported in Other Non-Operating Expense, Net in the
Consolidated Statements of Operations in the period they occur. Exchange losses on foreign currency
transactions were $9.6 million, $6.8 million, and $9.4 million for the years ended September 30, 2015, 2014 and
2013, respectively.
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