Invacare 2012 Annual Report Download - page 125

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INVACARE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
The carrying amounts and fair values of the company’s financial instruments at December 31, 2012 and
2011 are as follows (in thousands):
2012 2011
Carrying
Value Fair Value
Carrying
Value Fair Value
Cash and cash equivalents ............... $ 38,791 $ 38,791 $ 34,924 $ 34,924
Other investments ..................... 1,171 1,171 1,362 1,362
Installment receivables, net of reserves ..... 2,594 2,594 7,477 7,477
Long-term debt (including current maturities
of long-term debt) ..................... (234,802) (234,072) (265,484) (264,112)
Forward contracts in Other Current Assets . . 1,062 1,062 1,685 1,685
Forward contracts in Accrued Expenses .... (1,057) (1,057) (505) (505)
Interest rate swap agreements in Other
Current Assets ........................ — — 18 18
Interest rate swap agreements in Accrued
Expenses ............................ (316) (316) (388) (388)
The company, in estimating its fair value disclosures for financial instruments, used the following methods
and assumptions:
Cash, cash equivalents: The carrying amount reported in the balance sheet for cash, cash equivalents equals
its fair value.
Installment receivables: The carrying amount reported in the balance sheet for installment receivables
approximates its fair value. The interest rates associated with these receivables have not varied significantly since
inception. Management believes that after consideration of the credit risk, the net book value of the installment
receivables approximates market value.
Long-term debt: Fair value for the company’s convertible debt is based on quoted market-based estimates as
of the end of the year, while the revolving credit facility fair values are based upon the company’s estimate of the
market for similar borrowing arrangements. These fair values are deemed to be categorized as Level 2 in the fair
value hierarchy.
Other investments: The company has made other investments in limited partnerships and non-marketable
equity securities, which are accounted for using the cost method, adjusted for any estimated declines in value.
These investments were acquired in private placements and there are no quoted market prices or stated rates of
return and the company does not have the ability to easily sell these investments. The company completes an
evaluation of the residual value related to these investments in the fourth quarter of each year. No impairment
was recognized in 2012 while immaterial losses were recognized in the fourth quarters of 2011 and 2010 and
included in the All Other segment.
Other Intangibles and Goodwill: Under Intangibles—Goodwill and Other, ASC 350, goodwill and
intangible assets deemed to have indefinite lives are subject to annual impairment tests. Furthermore, goodwill
and other long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate
FS-45