Supercuts 2011 Annual Report Download - page 101

Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
1. BUSINESS DESCRIPTION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
comprehensive income in one continuous statement, referred to as the statement of comprehensive income, or in two separate, but consecutive
statements. The new guidance eliminates the current option to report other comprehensive income and its components in the statement of
changes in equity. While the new guidance changes the presentation of comprehensive income, there are no changes to the components that are
recognized in net income or other comprehensive income under current accounting guidance. This new guidance is effective for fiscal years and
interim periods beginning after December 15, 2011. The adoption of the guidance on July 1, 2012 will not have an impact on the Company's
financial position, results of operations or cash flows.
Fair Value Measurement
In April 2011, the FASB issued guidance to achieve common fair value measurement and disclosure requirements between GAAP and
International Financial Reporting Standards. This new guidance amends current fair value measurement and disclosure guidance to include
increased transparency around valuation inputs and investment categorization. This new guidance is effective for fiscal years and interim periods
beginning after December 15, 2011. The adoption of the guidance on July 1, 2012 will not have an impact on the Company's consolidated
financial position, results of operations or cash flows.
2. DISCONTINUED OPERATIONS
On February 16, 2009, the Company sold its Trade Secret salon concept (Trade Secret). The Company concluded, after a comprehensive
review of strategic and financial options, to divest Trade Secret. The sale of Trade Secret included 655 company-owned salons and 57 franchise
salons, all of which had historically been reported within the Company's North America reportable segment. The sale of Trade Secret included
Cameron Capital I, Inc. (CCI). CCI owned and operated PureBeauty and BeautyFirst salons which were acquired by the Company on
February 20, 2008.
The Company concluded that Trade Secret qualified as held for sale as of December 31, 2008, under accounting for the impairment or
disposal of long-lived asset guidance, and is presented as discontinued operations in the Consolidated Statements of Operations for all periods
presented. The operations and cash flows of Trade Secret have been eliminated from ongoing operations of the Company and there will be no
significant continuing involvement in the operations after disposal pursuant to guidance in determining whether to report discontinued
operations. The agreement included a provision that the Company would supply product to the purchaser of Trade Secret and provide certain
administrative services for a transition period. Under this agreement, the Company recognized $20.0 and $32.2 million of product revenues on
the supply of product sold to the purchaser of Trade Secret and $1.9 and $2.9 million of other income related to the administrative services
during the years ended June 30, 2010 and 2009, respectively. The agreement was substantially complete as of September 30, 2009.
Beginning within the second quarter of fiscal year 2010, the Company has an agreement in which the Company provides warehouse
services to the purchaser of Trade Secret. Under the warehouse services agreement, the Company recognized $2.7 and $3.0 million of other
income related to warehouse services during the twelve months ended June 30, 2011 and 2010, respectively.
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