Nautilus 2000 Annual Report Download - page 33

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the method prescribed by Statement of Financial Accounting Standards ("SFAS") No.123, " Accounting for Stock-Based Compensation ," had
been applied in measuring compensation expense. See Note9.
Income Taxes
Deferred income tax assets and liabilities are computed annually for differences between the financial statement and tax bases of assets and
liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to periods in which the
differences are expected to affect taxable income. A valuation allowance is established when necessary to reduce deferred tax assets to the
amount more likely than not to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during
the period in deferred tax assets and liabilities.
Comprehensive Income
Effective January1, 1998, the Company adopted SFAS No.130, "Reporting Comprehensive Income," which requires presentation of
comprehensive income within an entity's primary financial statements. Comprehensive income is defined as net income as adjusted for changes
to equity resulting from events other than net income or transactions related to an entity's capital structure. Comprehensive income equaled net
income for all periods presented.
Fair Value of Financial Instruments
The carrying amount of the Company's cash and cash equivalents, trade receivables, trade payables, royalties payable, and accrued liabilities
approximates their estimated fair values due to the short-term maturities of those financial instruments.
Recent Accounting Pronouncement
In June1999, the FASB issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS133"). SFAS133
establishes accounting and reporting standards for all derivative instruments. SFAS133, as amended, is effective for fiscal years beginning after
June15, 2000. We do not currently have any derivative instruments and, accordingly, do not expect the adoption of SFAS133 to have an impact
on our financial position or results of operations.
Reclassifications
Certain amounts from 1998 and 1999 have been reclassified to conform to the 2000 presentation.
2.OPERATING SEGMENTS
The Company's operating segments include its direct products segment which includes all products marketed directly to consumers through a
variety of direct marketing channels. The Bowflex line of fitness equipment and the Nautilus Sleep Systems are the principal products in the
Company's direct products segment. The other operating segment is the commercial and retail products line which includes products and
operations that are not direct marketed to consumers. Products in this segment include Nautilus commercial and retail fitness equipment and
accessories. Accounting policies used by the segments are the same as those disclosed in Note1.
32
2002. EDGAR Online, Inc.