Sunbeam 2004 Annual Report Download - page 48

Download and view the complete annual report

Please find page 48 of the 2004 Sunbeam annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 78

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78

Jarden Corporation
Notes to Consolidated Financial Statements (cont’d)
December 31, 2004
Prepaid Media and Advertising Costs
Direct advertising costs (primarily media expenses) related to infomercial sales are recorded as
prepaid assets when paid in advance. The expense is recognized when the infomercial is aired. All
production expenses related to the infomercials are expensed upon the first showing of the infomercial.
The Company’s other advertising costs, consisting primarily of ad demo and cooperative advertising,
media placement and promotions, are expensed as incurred. The Company incurred advertising costs in
the approximate amounts of $24.0 million, $25.9 million and $17.8 million for the years 2004, 2003 and
2002, respectively. Amounts of $0.4 million and $0.5 million were included in the Company’s Prepaid
Expenses and Other Current Assets in the Consolidated Balance Sheet as of December 31, 2004 and
2003, respectively.
Cash and Cash Equivalents
Cash equivalents include financial investments with a maturity of three months or less when
purchased.
Accounts Receivable
The Company provides credit, in the normal course of business, to its customers. The Company
maintains an allowance for doubtful customer accounts for estimated losses that may result from the
inability of the Company’s customers to make required payments. That estimate is based on a variety of
factors, including historical collection experience, current economic and market conditions, and a
review of the current status of each customer’s trade accounts receivable. The Company charges actual
losses when incurred to this allowance.
Inventories
Inventories are stated at the lower of cost, determined on the first-in, first-out method, or market.
Property, Plant and Equipment
Property, plant and equipment are recorded at cost less accumulated depreciation. Maintenance
and repair costs are charged to expense as incurred, and expenditures that extend the useful lives of the
assets are capitalized. The Company reviews property, plant and equipment for impairment whenever
events or circumstances indicate that carrying amounts may not be recoverable through future
undiscounted cash flows, excluding interest cost.
Depreciation
Depreciation is calculated on the straight-line basis in amounts sufficient to amortize the cost of the
assets over their estimated useful lives (buildings – 30 to 50 years; machinery and equipment – 3to20
years).
Intangible Assets
Intangible assets consist principally of goodwill and intangible assets recorded in connection with
brand names and manufacturing processes expertise. Goodwill represents the excess of the purchase
prices of acquired businesses over the estimated fair values of the net assets acquired. The Company’s
goodwill and intangible assets that are deemed to have indefinite lives are no longer amortized under
current accounting guidance but are subject to annual impairment tests. Other intangible assets are
46