Garmin 2010 Annual Report Download - page 120

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S-6
Garmin Ltd
Notes to Statutory Financial Statements
December 25, 2010
(CHF in thousands, except share and per share information and where otherwise indicated)
1. General
Garmin Ltd (the Company) is the parent company of the Garmin Group whose consolidated
financial statements include 100 percent of the assets, liabilities, revenues, expenses, income and
cash flows of Garmin Ltd and subsidiaries in which the Company has a controlling interest, as if
the Company and its subsidiaries were a single company. The consolidated financial statements
are of overriding importance for the purpose of the economic and financial assessment of the
Company.
The Company was incorporated on February 9, 2010 and therefore these financial statements
cover the period from February 9, 2010 through December 25, 2010. The Company has adopted
a 52-53-week period ending on the last Saturday of the calendar year. Due to the fact that there
are not exactly 52 weeks in a calendar year and there is slightly more than one additional day per
year (not including the effects of a leap year) in each calendar year as compared to a 52-week
fiscal year, the Company will have a fiscal year comprising 53 weeks in certain fiscal years, as
determined by when the last Saturday of the calendar year occurs.
Summary of significant accounting policies
Exchange rate differences — The Company keeps its accounting records in U.S. Dollars (USD)
and translates them into Swiss Francs (CHF) for statutory reporting purposes. Assets and
liabilities denominated in foreign currencies are translated into CHF using the year-end rates of
exchange, except investments in affiliates and the Company’s equity (other than current-year
transactions), which are translated at historical rates. Income statement transactions are translated
into Swiss francs at the average rate of the year. Exchange differences arising from business
transactions are recorded in the income statement, except for net unrealized gains, which are
deferred and recorded in other current liabilities. Exchange differences arising from the
translation of the financial statements in USD to CHF are recorded in the income statement.
Investments in affiliates — Investments in affiliates are recorded at historical cost less
adjustment for impairment of value.