Juno 2012 Annual Report Download - page 130

Table of Contents
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


other than quoted prices in active markets that are observable either directly or indirectly (Level 2); and (iii) unobservable inputs that require the
Company to use present value and other valuation techniques in the determination of fair value (Level 3). In accordance with ASC 820, the Company
maximizes the use of observable inputs and minimizes the use of unobservable inputs when developing fair value measurements. When available, the
Company uses quoted market prices to measure fair value. If market prices are not available, fair value measurement is based upon models that use
primarily market-based or independently-sourced market parameters. If market observable inputs for model-based valuation techniques are not available,
the Company will be required to make judgments about assumptions market participants would use in estimating the fair value of the financial
instrument. Fair values of cash and cash equivalents, short-term accounts receivable, accounts payable, accrued liabilities, and short-term borrowings
approximate their carrying amounts because of their short-term nature. Time deposits, which are included in cash equivalents, are valued at amortized
cost, which approximates fair value. Derivative instruments are recognized in the consolidated balance sheets at their fair values based on third-party
quotes. The fair values for the interest rate caps are calculated using an option pricing model based on available forward yield curves for caplets with the
same characteristics adjusted for the counterparty risk of nonperformance based on the credit spread derived from the applicable five-year default swap
rates. The fair values of the forward foreign currency exchange contracts are calculated based on quoted market prices of similar instruments adjusted
for counterparty risk of nonperformance. The key assumptions used in calculating the fair value of these derivative instruments are the forward rates,
discount rate and implied volatility. Long-term debt is carried at amortized cost. However, the Company is required to estimate the fair value of long-
term debt under ASC 825, , based on the discounted cash flow method. The Company estimates
the fair value of its long-term debt using Level 2 inputs based on quoted prices of comparable risk bonds using market prices and expected future
interest rates based on quoted market rates from the U.S. dollar-denominated interest-rate swap curve.
 —Goodwill represents the excess of the purchase price of an acquired entity over the fair value of
the net tangible and intangible assets acquired. Indefinite-lived intangible assets acquired in a business combination are initially recorded at
management's estimate of their fair values. The Company accounts for goodwill and indefinite-lived intangible assets in accordance with ASC 350,
, which among other things, addresses financial accounting and reporting requirements for acquired goodwill and
indefinite-lived intangible assets. ASC 350 prohibits the amortization of goodwill and indefinite-lived intangible assets and requires the Company to test
goodwill, at the reporting unit level, and indefinite-lived intangible assets for impairment at least annually.
The Company tests the goodwill of its reporting units and indefinite-lived intangible assets for impairment annually during the fourth quarter of its
fiscal year and whenever events occur or circumstances change that would more likely than not indicate that the goodwill and/or indefinite-lived
intangible assets might be impaired. Events or circumstances which could trigger an impairment review include, but are not limited to, a significant
adverse change in legal factors or in the business climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key
management or other personnel, significant changes in the manner of the Company's use of the acquired assets or the strategy for the acquired business
or the Company's overall business, significant negative industry or
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