Cash America 2014 Annual Report Download - page 105

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
90
Long-Lived Assets Other Than Goodwill and Indefinite-Lived 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 has historically used foreign currency forward contracts for hedging exposure with its foreign operations.
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.
Equity Securities
The Company accounts for its marketable and non-marketable equity securities in accordance with ASC
323 and ASC 325, respectively. The Company has marketable equity securities that are held in its Nonqualified
Savings Plan, marketable equity securities for its retained shares of Enova common stock, and non-marketable
equity securities, each as described further below.
The Company holds marketable equity securities in its Nonqualified Saving Plan for certain employees. See
Note 17 for a description of these plans. The securities are classified as trading securities, but the unrealized gains
and losses on these securities offset and have no net impact on the Company's net income. These securities are
recorded at fair value and have an offsetting liability of equal amount. The plan costs associated with these
securities are included in “Operations and administration expenses” in the consolidated statements of income. The
assets related to the Nonqualified Saving Plan are held in “Other Assets,” and the offsetting liability is held in
“Accounts payable and accrued expenses” in the consolidated balance sheets.
The Company retained approximately 20% of the outstanding shares of Enova common stock after the
Enova Spin-off. The shares of Enova common stock held by the Company 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. Enova was in the process of registering these securities with the SEC as of
December 31, 2014. Since these securities are not yet registered with the SEC, the Company has valued this
investment based on the market determined stock price of Enova on December 31, 2014, less an adjustment factor
due to the unregistered nature of the shares.
The Company’s non-marketable equity securities are recorded on a cost basis. The carrying value for the
investment is adjusted for cash contributions and distributions. These securities are held in “Other assets” in the
Company’s consolidated balance sheets.
The Company evaluates marketable and non-marketable equity securities for impairment if circumstances
arise that indicate that an impairment may exist. Non-marketable equity securities are held in “Other assets” in the
Company’s consolidated balance sheets. If an impairment of an equity security is determined to be other than