Invacare 2011 Annual Report Download - page 91
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INVACARE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Other Intangibles —Continued
intellectual property impairment of $201,000 in the Asia/Pacific segment. The after-tax and pre-tax impairment
amounts were the same for each of the above impairments except for the indefinite-lived trademark impairment
in the Europe segment which was $320,000 after-tax. As a result of the company’s 2010 intangible impairment
review, impairment charges of $336,000 and $248,000 were recorded related to trademarks for IPG and a
customer list for NA/HME, respectively, as the actual and remaining forecasted cash flows associated with these
intangibles were less than the cash flows originally used to value the intangibles.
Current Liabilities
Accrued expenses as of December 31, 2011 and 2010 consisted of accruals for the following (in thousands):
2011 2010
Salaries and wages ........................................................ $ 42,174 $ 46,658
Taxes other than income taxes, primarily Value Added Taxes ...................... 23,007 19,981
Warranty cost ............................................................ 19,842 18,252
Freight .................................................................. 11,087 11,189
Professional .............................................................. 7,252 7,333
Product liability, current portion .............................................. 3,468 4,134
Rebates ................................................................. 3,681 3,320
Insurance ................................................................ 2,657 2,393
Interest .................................................................. 1,255 2,273
Derivative liability (foreign forward exchange contracts) .......................... 893 1,929
Severance ............................................................... 5,158 524
Other items, principally trade accruals ......................................... 12,121 12,093
$132,595 $130,079
Accrued rebates relate to several volume incentive programs the company offers its customers. The
company accounts for these rebates as a reduction of revenue when the products are sold in accordance with the
guidance in ASC 605-50, Customer Payments and Incentives.
Changes in accrued warranty costs were as follows (in thousands):
2011 2010
Balance as of January 1 ...................................................... $18,252 $21,506
Warranties provided during the period .......................................... 11,225 5,996
Settlements made during the period ............................................. (12,068) (9,681)
Changes in liability for pre-existing warranties during the period, including expirations . . . 2,433 431
Balance as of December 31 ................................................... $19,842 $18,252
The increase in the liability for pre-existing warranties in 2011, as shown above, is the result of product
recalls.
FS-19