WeightWatchers 2010 Annual Report Download - page 87

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WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIE
S
NO
TE
S
T
OCO
N
SO
LIDATED FINAN
C
IAL
S
TATEMENT
S
(
IN THOUSANDS, EXCEPT PER SHARE AMOUNTS
)
1
. Bas
i
so
f
Presentat
i
on
The accompanying consolidated financial statements include the accounts of Weight Watchers International,
Inc. and all of its subsidiaries. The term “Company” as used throughout these notes is used to indicate Weigh
t
W
atchers International, Inc. and all of its businesses consolidated for
p
ur
p
oses of its financial statements. Th
e
term “WWI” as used throughout these notes is used to indicate Weight Watchers International, Inc. and all of the
Company’s businesses other than WW.com. The term “WW.com” as used throughout these notes is used t
o
indicate WeightWatchers.com, Inc. and all of the Company’s Internet-based businesses
.
A
s further discussed in Note 4, effective with its formation in February 2008, the Company consolidates th
e
f
inancial statements of its joint venture entity, Weight Watchers Danone China Limited, and its businesses (the
“Joint Venture”).
2
. Summary of Significant Accounting Policie
s
F
i
s
cal Year
:
The Company’s fiscal year ends on the Saturday closest to December 3
1
st
a
nd consists of either
5
2or
5
3-week periods. Fiscal year 2008 contained
5
3 weeks, while fiscal years 2010 and 2009 contained
5
2 weeks.
W
W.com’s fiscal year ends on December 3
1
st
of each year. This difference in fiscal years does not have a
material effect on the consolidated financial statements.
Use of Estimates
:
The preparation of financial statements, in conformity with accounting principles generally accepted in th
e
U
nited States of America (“U.S. GAAP”), requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of th
e
f
inancial statements, and the reported amounts of revenues and expenses during the reporting period. On a
n
o
ngoing basis, the Company evaluates its estimates and judgments, including those related to inventories, the
impairment analysis for goodwill and other indefinite-lived intangible assets, share-based compensation, incom
e
taxes, tax contingencies and litigation. The Company bases its estimates on historical experience and on variou
s
o
ther factors and assum
p
tions that it believes to be reasonable under the circumstances, the results of which for
m
the basis for making judgments about the carrying values of assets and liabilities that are not readily apparen
t
f
rom other sources. Actual amounts could differ from these estimates.
T
ranslation o
f
Foreign Currencies
:
F
or all foreign operations, the functional currency is the local currency. Assets and liabilities of thes
e
o
perations are translated into US dollars using the exchange rate in effect at the end of each reporting period
.
Income statement accounts are translated at the average rate of exchange prevailing during each reporting period.
T
ranslation adjustments arising from the use of differing exchange rates from period to period are included i
n
accumulated other com
p
rehensive income (loss).
F
oreign currency gains and losses arising from the translation of intercompany receivables with the
Company’s international subsidiaries are recorded as a component of other (income)/expense, net, unless the
r
eceivable is considered long-term in nature, in which case the foreign currency gains and losses are recorded as
a com
p
onent of com
p
rehensive income (loss)
.
F-7