Rayovac 2014 Annual Report Download - page 96

SPECTRUM BRANDS HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)
(Amounts in thousands, except per share figures)
carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that
includes the enactment date.
The Company recognizes the effect of income tax positions only if those positions are more likely than not
of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50%
likely of being realized. Changes in recognition or measurement are reflected in income tax expense in the period
in which the change in judgment occurs. Accrued interest expense and penalties related to uncertain tax positions
are recorded in Income tax expense.
(m) Foreign Currency Translation
Local currencies are considered the functional currencies for most of the Company’s operations outside the
United States. Assets and liabilities of the Company’s foreign subsidiaries are translated at the rate of exchange
existing at year-end, with revenues, expenses and cash flows translated at the average of the monthly exchange
rates. Adjustments resulting from translation of the financial statements are recorded as a component of
Accumulated other comprehensive income (loss) (“AOCI”). Also included in AOCI are the effects of exchange
rate changes on intercompany balances of a long-term nature.
As of September 30, 2014 and September 30, 2013, accumulated (losses) gains related to foreign currency
translation adjustments of $(39,517) and $(7,050), respectively, were reflected in the accompanying Consolidated
Statements of Financial Position in AOCI.
Foreign currency transaction gains and losses related to assets and liabilities that are denominated in a
currency other than the functional currency are reported in the Consolidated Statements of Operations in the
period they occur. Exchange losses on foreign currency transactions aggregating $6,775, $9,388 and $1,654 for
Fiscal 2014, Fiscal 2013 and Fiscal 2012, respectively, are included in Other expense, net, in the accompanying
Consolidated Statements of Operations.
(n) Shipping and Handling Costs
The Company incurred shipping and handling costs of $260,321, $246,090 and $198,152 during Fiscal 2014,
Fiscal 2013 and Fiscal 2012, respectively. Shipping and handling costs, which are included in Selling expenses in
the accompanying Consolidated Statements of Operations, include costs incurred with third-party carriers to
transport products to customers and salaries and overhead costs related to activities to prepare the Company’s
products for shipment at the Company’s distribution facilities.
(o) Advertising Costs
The Company incurred advertising costs of $21,356, $22,971 and $20,706 during Fiscal 2014, Fiscal 2013 and
Fiscal 2012, respectively. Such advertising costs are included in Selling expenses in the accompanying
Consolidated Statements of Operations and include agency fees and other costs to create advertisements, as well
as costs paid to third parties to print or broadcast the Company’s advertisements.
(p) Research and Development Costs
Research and development costs are charged to expense in the period they are incurred.
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