Kimberly-Clark 2010 Annual Report Download - page 46

KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
investments are evaluated for impairment when warranted. An impairment loss would be recorded whenever a
decline in value of an equity investment below its carrying amount is determined to be other than temporary. In
judging “other than temporary”, we would consider the length of time and extent to which the fair value of the
equity company investment has been less than the carrying amount, the near-term and longer-term operating and
financial prospects of the equity company, and our longer-term intent of retaining the investment in the equity
company.
Revenue Recognition
Sales revenue is recognized at the time of product shipment or delivery, depending on when title passes, to
unaffiliated customers, and when all of the following have occurred: a firm sales agreement is in place, pricing is
fixed or determinable, and collection is reasonably assured. Sales are reported net of returns, consumer and trade
promotions, rebates and freight allowed. Taxes imposed by governmental authorities on our revenue-producing
activities with customers, such as sales taxes and value-added taxes, are excluded from net sales.
Sales Incentives and Trade Promotion Allowances
The cost of promotion activities provided to customers is classified as a reduction in sales revenue. In
addition, the estimated redemption value of consumer coupons is recorded at the time the coupons are issued and
classified as a reduction in sales revenue. Estimates of trade promotion liabilities for promotional program costs
incurred, but unpaid, are generally based on estimates of the quantity of customer sales, timing of promotional
activities and forecasted costs for activities within the promotional programs. Settlement of these liabilities
sometimes occurs in periods subsequent to the date of the promotion activity.
Advertising Expense
Advertising costs are expensed in the year the related advertisement is first presented by the media. For
interim reporting purposes, advertising expenses are charged to operations as a percentage of sales based on
estimated sales and related advertising expense for the full year.
Research Expense
Research and development costs are charged to expense as incurred.
Environmental Expenditures
Environmental expenditures related to current operations that qualify as property, plant and equipment or
which substantially increase the economic value or extend the useful life of an asset are capitalized, and all other
environmental expenditures are expensed as incurred. Liabilities are recorded when environmental assessments
and/or remedial efforts are probable and the costs can be reasonably estimated. Generally, the timing of these
accruals coincides with completion of a feasibility study or a commitment to a formal plan of action. At
environmental sites in which more than one potentially responsible party has been identified, a liability is
recorded for the estimated allocable share of costs related to our involvement with the site as well as an estimated
allocable share of costs related to the involvement of insolvent or unidentified parties. At environmental sites in
which we are the only responsible party, a liability for the total estimated costs of remediation is recorded.
Liabilities for future expenditures for environmental remediation obligations are not discounted and do not reflect
any anticipated recoveries from insurers.
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