Jamba Juice 2007 Annual Report Download - page 140

Table of Contents
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NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Long-Lived Assets
Asset impairments are recorded when the carrying values of assets are not recoverable. For purposes of recognizing and measuring impairment of long-
lived assets, the Company categorizes assets of operating stores as “Assets to Be Held and Used” and assets of stores that have been closed as “Assets to Be
Disposed Of.” The Company evaluates assets at the store level because this is the lowest level of identifiable cash flows ascertainable to evaluate impairment.
Assets being tested for recoverability at this level include tangible long-lived assets.
The Company reviews long-lived assets to be held and used for impairment whenever events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable or at least annually. Impairment losses are measured as the amount by which the carrying amount of assets exceeds
the fair value of the asset. When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate
commensurate with the risks associated with the recovery of the asset. No impairment losses were incurred in 2004.
Deferred Rent
The Company’s lease agreements generally include scheduled rent increases during the lease term, or for rental payments commencing at a date other
than the date of initial occupancy. Rent expense is recognized on a straight-line basis over the respective terms of the leases. The difference between the amount
charged to operations and cash paid under the leases is recorded as deferred rent.
Revenue Recognition
Revenue is recognized when the product is sold. Revenue from jambacards and gift certificates are recognized upon redemption. If collection is doubtful,
a receivable and an allowance are recorded without any revenue recognition. Revenue is recognized at the time such receivables are collected. There was no
allowance required as of December 14, 2004.
Pre-opening Costs
Pre-opening costs include certain costs incurred to establish a new store location and costs incurred in connection with the start-up of its operations.
The Company records pre-opening expenses in accordance with Statement of Position 98-5,  , which
requires costs of start-up activities and organization costs to be expensed as incurred.
Marketing and Promotion
All marketing and promotion costs are expensed as incurred. Marketing and promotion costs amounted to $307,044 as of December 14, 2004.
Income Taxes
Income or loss for tax reporting purposes is the responsibility of the individual members and, accordingly, no provision or benefit for income taxes is
recorded by the Company.
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