E-Z-GO 2000 Annual Report Download - page 41

Summary of Significant Accounting Policies
The financial statements have been prepared in accordance with accounting principles generally
accepted in the United States. Significant accounting policies appear in italics as an integral part of
the notes to the financial statements to which the policies relate.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash and short-term, highly liquid securities with original matu-
rities of ninety days or less.
Revenue Recognition
Revenue is generally recognized when products are delivered or services are performed. With
respect to aircraft, delivery is upon completion of manufacturing, customer acceptance and the
transfer of risks and rewards of ownership. Specific policies for the Finance segment and long-term
contracts are included in the related notes.
Effective October 1, 2000, the Company adopted Staff Accounting Bulletin (SAB) 101, “Revenue
Recognition in Financial Statements”. SAB 101 summarizes the Securities Exchange Commission’s
views regarding the application of generally accepted accounting principles to selected revenue
recognition issues. The adoption and implementation of SAB 101 did not have a material effect on
the results of operations or financial position of the Company.
Effective in the fourth quarter 2000, Textron reclassified certain items in its income statement and
restated revenues and costs for prior periods. A substantial portion of the reclassifications related to
the adoption of Emerging Issues Task Force (EITF) consensus on Issue No. 99-19 “Reporting
Revenue Gross as a Principal versus Net as an Agent”, whereby used aircraft sales are now reported
as revenues; previously they were netted against costs. Prior period financial information has been
reclassified to conform with the current year presentation. The result of the reclassifications was to
increase revenue and costs by $254 million, $275 million and $191 million for 2000, 1999 and 1998,
respectively. There was no effect on income from continuing operations or net income.
Nature of Operations and Principles of Consolidation
Textron is a global, multi-industry company with manufacturing and finance operations. Its principal
markets (listed within segments in order of the amount of 2000 revenues) and the major locations
of such markets are as follows:
Segment Principal Markets Major Locations
Aircraft • Business jets • North America
• Commercial and military helicopters • Asia and Australia
• General aviation • South America
• Overnight express package carriers • Western Europe
• Commuter airlines, relief flights, tourism, and freight
Automotive • Automotive original equipment manufacturers and their suppliers • North America
• Western Europe
• South America
Fastening • Automotive • North America
Systems • Distributors • Western Europe
• Consumers • Asia and Australia
• Other OEMs • South America
• Electronics
• Aerospace
Industrial • Industrial components: commercial aerospace and defense • North America
Products • Golf and turf-care products: golf courses, resort communities, • Western Europe
and commercial and industrial users • Asia and Australia
• Fluid and power systems: original equipment manufacturers,
distributors and end-users of a wide variety of products
• Light construction equipment: commercial customers,
national rental fleets, and the U.S. Government
Finance • Commercial loans and leases • North America
Financial Statement Presentation1
Notes to Consolidated Financial Statements
39 TEXTRON 2000 ANNUAL REPORT