Rayovac 2010 Annual Report Download - page 91

total, $314 million was recorded as a non-cash deferred income tax benefit and $49 million as a reduction to
goodwill. During Fiscal 2008 we recorded a non-cash deferred income tax charge of approximately $200 million
related to increasing the valuation allowance against our net deferred tax assets.
The fair value of our Global Batteries & Personal Care, Global Pet Supplies, Small Appliances and Home
and Garden Business reporting units, which are also our segments, exceeded their carry values by 52%, 49%,
13% and 10%, respectively, as of the date of our latest annual impairment testing.
See Note 3(h), Significant Accounting Policies and Practices—Property, Plant and Equipment, Note 3(i),
Significant Accounting Policies and Practices—Intangible Assets, Note 5, Property, Plant and Equipment,
Note 6, Goodwill and Intangible Assets, Note 8, Income Taxes, and Note 9, Discontinued Operations, of Notes to
Consolidated Financial Statements included in this Annual Report on Form 10-K for more information about
these assets.
Revenue Recognition and Concentration of Credit Risk
We recognize revenue from product sales generally upon delivery to the customer or the shipping point in
situations where the customer picks up the product or where delivery terms so stipulate. This represents the point
at which title and all risks and rewards of ownership of the product are passed, provided that: there are no
uncertainties regarding customer acceptance; there is persuasive evidence that an arrangement exists; the price to
the buyer is fixed or determinable; and collectibility is deemed reasonably assured. We are generally not
obligated to allow for, and our general policy is not to accept, product returns for battery sales. We do accept
returns in specific instances related to our electric shaving and grooming, electric personal care, home and
garden, small appliances and pet supply products. The provision for customer returns is based on historical sales
and returns and other relevant information. We estimate and accrue the cost of returns, which are treated as a
reduction of net sales.
We enter into various promotional arrangements, primarily with retail customers, including arrangements
entitling such retailers to cash rebates from us based on the level of their purchases, which require us to estimate
and accrue the costs of the promotional programs. These costs are generally treated as a reduction of net sales.
We also enter into promotional arrangements that target the ultimate consumer. Such arrangements are
treated as either a reduction of net sales or an increase in cost of sales, based on the type of promotional program.
The income statement presentation of our promotional arrangements complies with ASC Topic 605: “Revenue
Recognition.” Cash consideration, or an equivalent thereto, given to a customer is generally classified as a
reduction of net sales. If we provide a customer anything other than cash, the cost of the consideration is
classified as an expense and included in cost of sales.
For all types of promotional arrangements and programs, we monitor our commitments and use statistical
measures and past experience to determine the amounts to be recorded for the estimate of the earned, but unpaid,
promotional costs. The terms of our customer-related promotional arrangements and programs are tailored to
each customer and are generally documented through written contracts, correspondence or other communications
with the individual customers.
We also enter into various arrangements, primarily with retail customers, which require us to make an
upfront cash, or “slotting” payment, to secure the right to distribute through such customer. We capitalize slotting
payments, provided the payments are supported by a time or volume based arrangement with the retailer, and
amortize the associated payment over the appropriate time or volume based term of the arrangement. The
amortization of slotting payments is treated as a reduction in net sales and a corresponding asset is reported in
Deferred charges and other in our Consolidated Statements of Financial Position included in this Annual Report
on Form 10-K.
81