Creative 2004 Annual Report Download - page 30

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28
Included in property and equipment are assets purchased under capital lease obligations with a cost and accumulated depreciation of
approximately $16.2 million and $8.7 million for fiscal 2004, and $9.0 million and $4.6 million for fiscal 2003, respectively.
As of June 30
2004 2003
Other non-current assets:
Other intangible assets $ 40,082 $ 33,682
Accumulated amortization (28,216) (24,917)
Other intangible assets, net 11,866 8,765
Goodwill 91,976 91,976
Other non-current assets 13,929 7,616
Total other non-current assets $ 117,771 $ 108,357
Goodwill and other intangible assets fully amortized were excluded from above. Other intangible assets amortization expense was $3.3
million, $9.1 million and $5.2 million for fiscal year 2004, 2003 and 2002, and estimated to be $3.8 million, $3.3 million, $3.1 million
and $1.7 million in fiscal year 2005, 2006, 2007 and 2008, respectively.
As of June 30
2004 2003
Other accrued liabilities:
Marketing accruals $ 26,307 $ 20,732
Payroll accruals 20,443 18,177
Royalty accruals 8,300 6,319
Other accruals 33,492 34,345
Total other accrued liabilities $ 88,542 $ 79,573
Other accruals of $33.5 million and $34.3 million as of June 30, 2004 and 2003 includes accruals for various operating expense items
that individually account for less than 5% of the total current liabilities.
NOTE 4 – PRODUCT WARRANTIES
The warranty period for the bulk of Creative’s products typically ranges between 1 to 3 years. The product warranty accrual reflects
management’s best estimate of probable liability under its product warranties. Management determines the warranty provision based
on known product failures (if any), historical experience, and other currently available evidence.
Changes in the product warranty accrual for the fiscal year 2004 was as follows (in US$’000):
As of June 30
2004 2003
Balance at the beginning of the year $ 2,835 $ 2,292
Accruals for warranties issued during the period 8,417 2,660
Adjustments related to pre-existing warranties (include changes in estimates) (149) (94)
Settlements made (in cash or in kind) during the period (4,871) (2,023)
Balance at the end of the year $ 6,232 $ 2,835
NOTE 3 – BALANCE SHEET DETAIL (in US$’000) (Cont’d)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS