Lululemon 2011 Annual Report Download - page 65

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Table of Contents
The following table summarizes the fair values of the net assets acquired at the date of acquisition:
As a result of the Company obtaining control over lululemon australia, the Company’s previously held 13 percent interest was remeasured
to fair value, resulting in a gain of $1,792. This gain has been recognized in the line item Other income (expense), net in the Company’s
consolidated statements of operations.
The fair value of the non-controlling interest of $3,554 in lululemon australia was estimated by applying a market approach and an income
approach. This fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement as
defined in ASC Topic 820, Fair Value Measurements and Disclosures (“ASC 820”). The fair value estimates use standard valuation techniques,
including discounted cash flows, comparable transactions and internal projections, and include assumed adjustments due to the lack of control or
lack of marketability that market participants would consider when estimating the fair value of the non-controlling interest in lululemon
australia.
In July 2010, the Company reacquired in an asset purchase transaction a franchised store in Saskatoon, Saskatchewan for total cash
consideration of $6,610. Included in the Company’s consolidated statements of operations for the year ended January 30, 2011 are the results of
the reacquired Saskatoon franchised store from the date of acquisition to January 30, 2011.
The following table summarizes the fair values of the net assets acquired at the date of acquisition:
The acquisition of the franchised stores is part of management’s vertical retail growth strategy. The reacquired franchise rights are
amortized on a straight-line basis over their estimated useful lives. Goodwill is reviewed for impairment annually, or as events occur or
circumstances arise which may reduce the fair value of goodwill below carrying value. The weighted-average remaining useful lives of the
reacquired franchise rights was 4.25 as at January 29, 2012 and 5.24 years as at January 30, 2011.
62
Inventory
$
3,053
Prepaid and other assets
709
Property and equipment
1,812
Goodwill and intangible assets
11,874
Total assets acquired
17,448
Current and non
-
current liabilities
2,196
Total liabilities assumed
2,196
Total identifiable net assets
$
15,252
Inventory
$
325
Prepaid and other current assets
9
Property and equipment
174
Goodwill
6,371
Total assets acquired
6,879
Current and non
-
current liabilities
269
Total liabilities assumed
269
Net assets acquired
$
6,610