Cash America 2014 Annual Report Download - page 100

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
85
Through April 2013, the Company had a contractual relationship with a third party entity, Huminal, to
compensate and maintain the labor force of its Mexico pawn operations. The Company qualified as the primary
beneficiary of Huminal in accordance with ASC 810. Therefore, the results and balances of Huminal were
consolidated and allocated to net income attributable to noncontrolling interests. In May 2013, the Company
acquired the remaining outstanding common stock of Huminal to increase its ownership to 100% of Huminal and,
as a result, Huminal became a wholly-owned subsidiary of the Company as of that date. The Company accounted
for this transaction as a change in ownership interests that does not result in a change in control.
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 revenue and expenses during the reporting periods
presented. 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, certain equity
securities, goodwill, long-lived and intangible assets, income taxes, contingencies and litigation. Management bases
its estimates on historical experience, empirical data and on various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for making judgments about the carrying
values of assets and liabilities. Actual results may differ from these estimates.
Foreign Currency Translations
Prior to the sale of the Company’s Mexico-based pawn operations in August 2014 (see Note 4) and the
Enova Spin-off in November 2014 (see Note 3), the Company had operations outside of the United States that
involved foreign currency transactions and translations. The functional currencies for the Company’s subsidiaries
that served residents of the United Kingdom, Australia, Canada, Mexico and Brazil were the British pound, the
Australian dollar, the Canadian dollar, the Mexican peso and the Brazilian real, respectively. The assets and
liabilities associated with these operations were translated into U.S. dollars at the exchange rates in effect at each
applicable balance sheet date, and the resulting adjustments were recorded in AOCI as a separate component of
equity. Revenue and expenses were translated at the monthly average exchange rates occurring during each period.
Cash and Cash Equivalents
The Company considers cash on hand in operating locations, deposits in banks and short-term investments
with original maturities of 90 days or less as cash and cash equivalents.
Restricted Cash
Restricted cash represents the amount mandated by the CFPB through its November 20, 2013 Consent
Order to be set aside for payments to customers in connection with the Ohio Reimbursement Program. See Note 13
for further discussion of the reimbursements to Ohio customers in connection with the Ohio Reimbursement
Program. Changes in restricted cash are reflected in “Cash flows from operating activities” in the consolidated
statement of cash flows.
Pawn Loans, Pawn Loan Fees and Service Charges
Revenue Recognition—Pawn Lending
Pawn loan fees and service charges revenue is accrued ratably over the term of the loan for the portion of
those pawn loans estimated to be collectible.