Cash America 2013 Annual Report Download - page 142

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
117
(“ASU”) No. 2012-02, Intangibles—Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for
Impairment (“ASU 2012-02”), and determined that it was not more likely than not that the indefinite-lived intangible
assets are impaired. Therefore, no further quantitative assessment was required.
There were no triggering events between June 30, 2013 and December 31, 2013 that would require an
additional impairment analysis of the Company’s goodwill or other indefinite-lived intangible assets. As of December
31, 2013, the Company had $705.6 million of goodwill, of which $646.9 million is expected to be deductible for tax
purposes.
Long-Lived Assets Other Than Goodwill and Other Intangible Assets
An evaluation of the recoverability of property and equipment and intangible assets subject to amortization is
performed whenever the facts and circumstances indicate that the carrying value may be impaired. An impairment loss
is recognized if the future undiscounted cash flows associated with the asset and the estimated fair value of the asset
are less than the asset’s corresponding carrying value. The amount of the impairment loss, if any, is the excess of the
asset’s carrying value over its estimated fair value.
The Company amortizes intangible assets subject to amortization on the basis of their expected periods of
benefit, generally three to 10 years. The costs of start-up activities and organization costs are charged to expense as
incurred.
Hedging and Derivatives Activity
As a policy, the Company does not hold issue or trade derivative instruments for speculative purposes. The
Company does periodically use derivative financial instruments, such as interest rate cap agreements and foreign
currency forward contracts for hedging purposes. The Company uses foreign currency forward contracts to minimize
the effects of foreign currency risk in the United Kingdom and Australia. See Note 17. The Company may periodically
enter into forward sale contracts with a major gold bullion bank to sell refined gold that is acquired in the normal
course of business from the Company’s liquidation of forfeited gold merchandise. These contracts are not accounted
for as derivatives because they meet the criteria for the normal purchases and normal sales scope exception in ASC
815, Derivatives and Hedging.
Equity Securities
The Company accounts for its marketable and non-marketable equity securities in accordance with ASC 323,
Investments—Equity Method and Joint Ventures, and ASC 325, Investments—Other—Cost Method Investments,
respectively. The Company’s marketable securities, except for marketable securities related to certain of the
Company’s nonqualified deferred compensation plans, which are described below, are classified as available-for-sale
and unrecognized gains and losses, net of tax, are recorded in “Accumulated other comprehensive income (loss)” in
the consolidated statements of equity. During the year ended December 31, 2013, the Company sold all of its
marketable securities not held in the Company’s nonqualified deferred compensation plans. See “Accumulated Other
Comprehensive Income (Loss)” section in Note 14. The Company’s non-marketable equity securities are recorded on a
cost basis. The Company evaluates marketable and non-marketable equity securities for impairment on a quarterly
basis. If an impairment of an equity security is determined to be other than temporary, the cost basis of the investment
will be reduced and the resulting loss recognized in net income in the period the other-than-temporary-impairment is
identified. Marketable and non-marketable equity securities are held in “Prepaid expenses and other assets” in the
consolidated balance sheets.
The Company also holds marketable securities related to its nonqualified deferred compensation plans for
certain employees. See Note 15 for a description of these plans. The securities are classified as trading securities and
the unrealized gains and losses on these securities are netted with the costs of the plan in “Operations and
administration expenses” on the consolidated statements of income. These marketable securities are recorded at fair