Invacare 2012 Annual Report Download - page 91

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INVACARE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
Recent Accounting Pronouncements: In June 2011, the Financial Accounting Standards Board (FASB)
issued Accounting Standards Update No. 2011-05, Presentation of Comprehensive Income (ASU 2011-05 or the
ASU). ASU 2011-05 requires comprehensive income to be reported in either a single statement or in two
consecutive statements reporting net income and other comprehensive income (OCI). The ASU does not change
what is required to be reported in OCI or the requirement to disclose reclassifications of items from OCI to net
income. The company adopted ASU 2011-05 in the first quarter 2012 Form 10-Q with no impact on the
company’s financial position, results of operations or cash flows other than the modification to the company’s
Consolidated Statement of Comprehensive Income (Loss).
Discontinued Operations
On December 21, 2012, the company’s board of directors approved of the company entering into an
agreement to sell Invacare Supply Group (ISG) and accordingly the company determined on that date that the
“held for sale” criteria of ASC 360-10-45-9 were met. Accordingly, the assets and liabilities of ISG (long-lived
asset disposal group) is shown at its carrying amount which is lower than the fair value less cost to sale.
On January 18, 2013, as part of the company’s globalization strategy, and to allow it to focus on its core
equipment product lines, the company completed the sale of the ISG medical supplies business for a purchase
price of approximately $150,800,000 in cash, which is subject to final post-closing adjustments. ISG had been
operated on a standalone basis and reported as a reportable segment of the company. The company expects to
record a gain of approximately $60,414,000 pre-tax in the first quarter of 2013 which represents the excess of the
net sales price over the book value of the assets and liabilities of ISG as of the date of completion of the
disposition. The sale of this business is expected to be dilutive to the Company’s results. The Company utilized
the proceeds from the sale to reduce debt outstanding under its revolving credit facility in the first quarter of 2013.
The assets and liabilities of ISG that were sold are shown as held for sale in the company’s Consolidated
Balance Sheets and are comprised of the following (in thousands):
December 31,
2012
December 31,
2011
(In thousands)
Trade receivables, net .......................................... $ 44,196 $ 37,583
Inventories, net ............................................... 25,165 24,042
Other current assets ............................................ 9,355 5,988
Property and Equipment, net ..................................... 1,368 —
Goodwill .................................................... 23,073 —
Assets held for sale - current ................................... $ 103,157 $ 67,613
Assets held for sale - non current ............................... $ — $ 24,445
Accounts payable ............................................. $ 17,692 $ 12,354
Accrued expenses ............................................. 4,602 3,902
Accrued income taxes .......................................... 1,064 680
Liabilities held for sale - current ................................ $ 23,358 $ 16,936
FS-11