Garmin 2003 Annual Report Download - page 51

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50
Inventories
Inventories are stated at the lower of cost or market. Cost is determined using the weighted-average method (which
approximates the first-in, first-out (FIFO) method) by GARMIN and the FIFO method by GII, GAT and GEL. Inventories consisted of
the following:
Property and Equipment
Property and equipment are recorded at cost and depreciated using the straight-line method over the following estimated
useful lives:
Long-Lived Assets
In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, the Company reviews
long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be
fully recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows
expected to result from the use and eventual disposition of the asset. That assessment shall be based on the carrying amount of the
asset at the date it is tested for recoverability. An impairment loss shall be measured as the amount by which the carrying amount of a
long-lived asset exceeds its fair value.
Dividends
On July 23, 2003 the Board of Directors declared a dividend of $0.50 per share to be paid on December 15, 2003 to
shareholders of record on December 1, 2003. The Company paid out a dividend in the amount of $54,040. The dividend has been
reported as a reduction of retained earnings to the extent of the stand-alone retained earnings of Garmin Ltd. The excess has been
reported as a reduction of additional paid-in-capital.
Approximately $67,882 and $50,669 of GARMIN’s retained earnings are indefinitely restricted from distribution to
stockholders pursuant to the law of Taiwan at December 27, 2003 and December 28, 2002, respectively.
Intangible Assets
On December 30, 2001, the Company adopted SFAS No. 142, Goodwill and Other Intangible Assets. The statement
addresses how goodwill and other intangible assets should be accounted for and tested for impairment. The standard requires
intangibles to be identified as either finite-lived or indefinite lived. Indefinite-lived intangible assets are no longer subject to
amortization, yet are to be tested for impairment annually and on an interim basis if events or changes in circumstances between
annual tests indicate that the asset might be impaired. The impairment test requires the determination of the value of the intangible
asset. If the value of the intangible asset is less than its carrying value, an impairment loss should be recognized in an amount equal to
the difference. The asset will then be carried at its new value. Finite lived intangible assets are still subject to amortization and are
Buildings and improvements 8-55 years
Office furniture and equipment 3-8 years
Manufacturing and engineering equipment 3-8 years
Vehicles 3-8 years
December 27, December 28,
2003 2002
Raw Materials $45,388 $24,177
Work-in-process 12,551 10,936
Finished goods 50,340 31,818
Inventory reserves (11,485) (9,424)
$96,794 $57,507