Garmin 2005 Annual Report Download - page 86

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56
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:
December 31, December 25,
2005 2004
Raw materials $65,348 $69,036
Work-in-process 27,845 29,959
Finished goods 121,404 67,274
Inventory reserves (14,756) (11,289)
$199,841 $154,980
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 is based on the carrying amount of the asset at the date it is tested for
recoverability. An impairment loss is measured as the amount by which the carrying amount of a long-lived asset
exceeds its fair value.
Dividends
On July 20, 2005 the Board of Directors declared a dividend of $0.50 per share to be paid on December 15,
2005 to shareholders of record on December 1, 2005. The Company paid out a dividend in the amount of $53,974.
The dividend has been reported as a reduction of retained earnings.
On July 23, 2004 the Board of Directors declared a dividend of $0.50 per share to be paid on December 15,
2004 to shareholders of record on December 1, 2004. The Company paid out a dividend in the amount of $54,095.
The dividend has been reported as a reduction of retained earnings.
Approximately $106,979 and $90,554 of GARMIN’s retained earnings are indefinitely restricted from
distribution to stockholders pursuant to the law of Taiwan at December 31, 2005 and December 25, 2004,
respectively.
Intangible Assets
Buildings and improvements 39 years
Office furniture and equipment 5 years
Manufacturing and engineering equipment 5 years
Vehicles 5 years