Sunbeam 2006 Annual Report Download - page 52

The Company provides for depreciation primarily using the straight-line method in amounts that allocate the cost of
property, plant and equipment over the following ranges of useful lives:
Buildings and improvements 5to 45 years
Machinery, equipment and tooling 3to 25 years
Furniture and fixtures 3to 10 years
Land is not depreciated.
Goodwill and Intangible Assets
Goodwill and certain intangibles (primarily trademarks) are not amortized; however, they are subject to evaluation for
impairment at least annually, or more frequently if facts and circumstances warrant, using a fair value based test. The fair
value based test is a two-step test. The first step involves comparing the fair value of each of its reporting units to the carrying
value of those reporting units. If the carrying value of a reporting unit exceeds the fair value of the reporting unit, the
Company is required to proceed to the second step. In the second step, the fair value of the reporting unit would be allocated
to the assets (including unrecognized intangibles) and liabilities of the reporting unit, with any residual representing the
implied fair value of goodwill. An impairment loss would be recognized if, and to the extent that, the carrying value of good-
will exceeded the implied value. During the years ended December 31,2006,2005 and 2004,the Company did not experi-
ence any impairment losses.
Amortization
Deferred debt issue costs are amortized over the term of the related debt. Identifiable intangible assets are recognized
apart from goodwill and are amortized over their estimated, useful lives, except for identifiable intangible assets with indefi-
nite lives, which are not amortized.
Stock Split
On June 9,2005,the Company’s Board of Directors declared a 3-for-2stock split in the form of a stock dividend of one
additional share of common stock for every two shares of common stock, payable on July 11,2005 to shareholders of record as
of the close of business on June 20,2005.The Company retained the current par value of $0.01 per sharefor all common
shares. All references to the number of shares outstanding, per share amounts, issued shares, restricted stock and stock option
data of the Company’s common shares have been restated to reflect the effect of the stock split for all periods presented in the
Company’s accompanying consolidated financial statements and footnotes thereto. Stockholders’ equity reflects the effect of
the stock split by reclassifying from “Additional paid-in capital” to “Common stock” an amount equal to the par value of the
additional shares resulting from the stock split.
Revenue Recognition
The Company recognizes revenues at the time of product shipment or delivery, depending upon when title passes, to
unaffiliated customers, and when all of the following have occurred: a firm sales agreement is in place, pricing is fixed or
determinable, and collection is reasonably assured. Revenue is recognized as the net amount estimated to be received after
deducting estimated amounts for product returns, discounts and allowances. The Company estimates future product returns
based upon historical return rates and its reasonable judgment.
Cost of Sales
The Company’s cost of sales includes the costs of raw materials and finished goods purchases, manufacturing costs and
warehouse and distribution costs.
Advertising Costs
Advertising costs consist primarily of ad demo, cooperative advertising, media placement and promotions, and are
expensed as incurred. The amounts charged to advertising and included in selling, general and administrative (“SG&A”)
expenses in the Consolidated Statements of Income for the years ended December 31,2006,2005 and 2004 were $68.4mil-
lion, $58.1million and $35.3million, respectively.
Notes to Consolidated Financial Statements
Jarden Corporation 2006 Annual Report
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