Audiovox 2004 Annual Report Download - page 64

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AUDIOVOX CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
November 30, 2002, 2003 and 2004
(Dollars in thousands, except share and per share data)
(e) Investment Securities
The Company classifies its investment securities in one of two
categories: trading or available−for−sale. Trading securities are
bought and held principally for the purpose of selling them in the
near term. All other securities not included in trading are classified
as available−for−sale.
Trading and available−for−sale securities are recorded at fair value.
Unrealized holding gains and losses on trading securities are included
in earnings. Unrealized holding gains and losses, net of the related
tax effect, on available−for−sale securities are excluded from
earnings and are reported as a component of accumulated other
comprehensive income until realized. Realized gains and losses from
the sale of available−for−sale securities are determined on a specific
identification basis. Dividend and interest income are recognized when
earned.
Short−term investments consist of tax−exempt auction rate notes which
are available for sale one year or less when purchased. The Company's
overall goal for short−term investments is to invest primarily in low
risk, fixed income securities with the intention of maintaining
principal while generating a moderate return. In accordance with the
Company's investment policy, all short−term investments are invested
in "investment grade" rated securities and all investments have an Aaa
or better rating at November 30, 2004. There were no unrealized gains
or losses on short−term investments at November 30, 2004.
As of November 30, 2003 and 2004, the Company's long−term investment
securities consist of $4,232 and $1,117, respectively, of
available−for−sale investment securities, which relates to 306,000
shares of CellStar Common Stock and trading securities of $5,280 and
$4,871, respectively, which consist of mutual funds that are held in
connection with the deferred compensation plan. During fiscal 2002,
2003 and 2004, the net unrealized holding (loss)/gain on trading
securities that has been included in earnings is $(558), $656 and
$409, respectively.
The cost, gross unrealized gains and losses and aggregate fair value
of the available−for−sale investment securities as of November 30,
2003 and 2004 were as follows:
2003
−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−
Gross Other−than−
Unrealized Temporary Aggregate
Holding Impairment Fair
Cost Gain (Loss) Charge Value
−−−−−−− −−−−−−−−−−− −−−−−−−−−−− −−−−−−−−−
CellStar Common Stock $ 2,401 $ 1,831 −− $ 4,232
Shintom Common Stock 21 −− $ (21) −−
−−−−−−− −−−−−−− −−−−−−− −−−−−−−
$ 2,422 $ 1,831 $ (21) $ 4,232
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