Cash America 2012 Annual Report Download - page 130

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
105
In the first quarter of 2012, the Company changed its accounting policy with respect to its foreign pawn
operations to reflect pledged collateral underlying delinquent pawn loans as “Merchandise held for disposition, net,”
the proceeds received from the disposition of this collateral as “Proceeds from disposition of merchandise” and the
cost basis for this collateral as “Cost of disposed merchandise” in its consolidated financial statements. The Company
believes this change, from one generally accepted accounting principle to another generally accepted accounting
principle, is preferable because it enhances comparability of its financial statements by reporting financial results
associated with its foreign pawn operations in the same manner as the financial results associated with its domestic
pawn operations. The Company did not change its accounting policy with respect to its domestic pawn operations, and
the change in the Company’s accounting policy with respect to its foreign pawn operations had no impact on the
Company’s consolidated Net Revenue or Net Income previously reported. The change has been applied
retrospectively. The following tables summarize the impact of the accounting change in the Company’s consolidated
financial statements as of December 31, 2011 and for the years ended December 31, 2011 and 2010, respectively
(dollars in thousands):
Year Ended Year Ended
December 31, 2011 December 31, 2010
As previousl
y
reported As Adjusted
As previousl
y
reported As Adjusted
Consolidated Statements of Income
Pawn loan fees and service charges $ 291,891 $ 282,197 $ 253,314 $ 243,713
Proceeds from disposition of merchandise 636,728 688,884 534,878 588,190
Total revenue 1,540,602 1,583,064 1,293,339 1,337,050
Disposed merchandise 405,155 447,617 338,756 382,467
Total cost of revenue 630,843 673,305 521,150 564,861
N
et revenue 909,759 909,759 772,189 772,189
Consolidated Statement of Cash Flows
Merchandise other than forfeited $ (7,238) $ (7,150) $ (6,914) $ (1,869)
Prepaid expenses and other assets (2,723) 2,337 1,337 4,146
N
et cash provided by operating activities 448,856 454,004 351,306 359,160
Pawn loans repaid 453,350 408,105 391,440 340,267
Principal recovered through dispositions of forfeited pawn loans 275,547 316,651 248,850 291,163
N
et cash used in investing activities (477,903) (482,044) (368,205) (377,065)
Consolidated Statement of Cash Flows—Supplemental Disclosures
Pawn loans forfeited and transferred to merchandise
held for disposition $ 299,693 $ 334,869 $ 245,872 $ 297,045
As of December 31, 2011
As previousl
y
reported As Adjusted
Consolidated Balance Sheet
Merchandise held for disposition, net $ 151,274 $ 161,884
Prepaid expenses and other assets 41,911 31,301

Use of Estimates
The preparation of these financial statements requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the dates of
the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods.
On an on-going basis, management evaluates its estimates and judgments, including those related to revenue
recognition on pawn loan fees and service charges, allowance for losses on consumer loans, goodwill, long-lived and
intangible assets, income taxes, contingencies and litigation. Management bases its estimates on historical experience,