Coach 2011 Annual Report Download - page 61

TABLE OF CONTENTS
COACH, INC.
Notes to Consolidated Financial Statements (Continued)
(dollars and shares in thousands, except per share data)
2. SIGNIFICANT ACCOUNTING POLICIES – (continued)
Net Income Per Share
Basic net income per share is calculated by dividing net income by the weighted-average number of shares outstanding during the
period. Diluted net income per share is calculated similarly but includes potential dilution from the exercise of stock options and vesting of
stock awards.
Reclassification
Certain prior year amounts, specifically relating to cash flows in connection with share-based awards, have been reclassified to conform
to the current year presentation in the Consolidated Statement of Cash Flows.
Recent Accounting Pronouncements
In May 2011, Accounting Standards Codification 820-10 “ Fair Value Measurements and Disclosures,” was amended to clarify
certain disclosure requirements and improve consistency with international reporting standards. This amendment is to be applied
prospectively and was effective for the Company beginning January 1, 2012. The adoption of this amendment did not have a material effect
on the Company’s consolidated financial statements.
Accounting Standards Codification Topic 220, “Comprehensive Income,” was amended in June 2011 to require entities to present the
total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single
continuous statement of comprehensive income or in two separate but consecutive statements. The amendment does not change the items that
must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income under
current GAAP. This guidance is effective for the Company’s fiscal year and interim periods beginning July 1, 2012. The Company is
currently evaluating this guidance, but does not expect its adoption to have a material effect on its consolidated financial statements.
In September 2011, Accounting Standards Codification 350-20, “ Intangibles — Goodwill and Other — Goodwill ,” was amended to
allow entities to assess qualitative factors to determine if it is more-likely-than-not that goodwill might be impaired, and whether it is
necessary to perform the two-step goodwill impairment test required under current accounting standards. This guidance is effective for the
Company’s fiscal year beginning July 1, 2012. The Company does not expect its adoption to have a material effect on its consolidated
financial statements.
3. ACQUISITIONS
On July 3, 2011, Coach acquired 100% of its domestic retail business in Singapore from the former distributor, Valiram Group, and on
January 1, 2012, acquired 100% of its domestic retail business in Taiwan from the former distributor, Tasa Meng. The results of the
acquired businesses have been included in the consolidated financial statements since July 3, 2011 and January 1, 2012, respectively,
within the Direct-to-Consumer segment. These acquisitions provide the Company with greater control over the brand in Singapore and
Taiwan, enabling Coach to raise brand awareness and grow market share with regional consumers. The aggregate purchase prices of the
Singapore and Taiwan businesses were $7,595 and $46,916, respectively, both paid during fiscal 2012.
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