Ingram Micro 2011 Annual Report Download - page 60

INGRAM MICRO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In 000s, except per share data)
receivables that may be factored at any point in time cannot exceed $150,000. We also have an uncommitted
factoring program in EMEA under which trade accounts receivable of another large customer may be sold,
without recourse, to a financial institution. The program’s total amount of receivables that may be factored at any
point in time cannot exceed €30,000, or approximately $39,000 at December 31, 2011. Available capacity under
these programs is dependent on the amount of trade accounts receivable already sold to and held by the financial
institutions, the level of our trade accounts receivable eligible to be sold into these programs and the financial
institutions’ willingness to purchase such receivables. At December 31, 2011 and January 1, 2011, we had a total
of $165,744 and $112,484, respectively, of trade accounts receivable sold to and held by the financial institutions
under these programs. Factoring fees of $3,068 and $1,605 were incurred in 2011 and 2010, respectively, related
to the sale of trade accounts receivable under both facilities are included in “other” in the other expense (income)
section of our consolidated statement of income.
Inventory
Our inventory consists of finished goods purchased from various vendors for resale. Inventory is stated at
the lower of average cost or market, and is determined from the price we pay vendors, including freight and
duties. We do not include labor, overhead or other general or administrative costs in our inventory.
Property and Equipment
Property and equipment are recorded at cost and depreciated using the straight-line method over the
estimated useful lives noted below. We also capitalize computer software costs that meet both the definition of
internal-use software and defined criteria for capitalization. Leasehold improvements are amortized over the
shorter of the lease term or the estimated useful life. Depreciable lives of property and equipment are as follows:
Buildings ................................................................ 40years
Leasehold improvements ................................................... 3-17 years
Distribution equipment ..................................................... 5-10 years
Computer equipment and software ............................................ 3-10 years
Maintenance, repairs and minor renewals are charged to expense as incurred. Additions, major renewals and
betterments to property and equipment are capitalized.
Long-Lived and Intangible Assets
We assess potential impairments to our long-lived assets when events or changes in circumstances indicate
that the carrying amount may not be fully recoverable. If required, an impairment loss is recognized as the
difference between the carrying value and the fair value of the assets. The gross carrying amounts of the finite-
lived identifiable intangible assets of $183,557 and $179,267 at December 31, 2011 and January 1, 2011,
respectively, are amortized over their remaining estimated lives ranging up to 16 years. The net carrying amount
was $73,330 and $81,992 at December 31, 2011 and January 1, 2011, respectively. Amortization expense was
$12,550, $16,743 and $17,270 for 2011, 2010 and 2009, respectively.
There were no impairments to our long-lived and other identifiable intangible assets in 2011, 2010 and
2009.
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