Sunbeam 2007 Annual Report Download - page 74

All significant intercompany transactions and balances have been eliminated upon consolidation. Unless
otherwise indicated, references in the Consolidated Financial Statements to 2007, 2006 and 2005 are to Jarden’s
calendar years ended December 31, 2007, 2006 and 2005, respectively.
Certain reclassifications have been made in the Company’s financial statements of prior years to conform to
the current year presentation. These reclassifications have no impact on previously reported net income.
Foreign Operations
The functional currency for most of the consolidated foreign operations is the local currency. Assets and
liabilities are translated at the year-end exchange rates; income and expenses are translated at average exchange
rates during the year. Net unrealized exchange adjustments arising on the translation of foreign currency financial
statements are reported as cumulative translation adjustments within accumulated other comprehensive income.
The U.S dollar is the functional currency for certain foreign subsidiaries that conduct their business
primarily in U.S. dollars. As such, monetary items are translated at current exchange rates, and non-monetary
items are translated at historical exchange rates.
Use of Estimates
The preparation of the consolidated financial statements in accordance with GAAP requires estimates and
assumptions that affect amounts reported and disclosed in the financial statements and accompanying notes.
Actual results could differ materially from those estimates. Significant accounting estimates and assumptions are
used for, but not limited to: the allowance for doubtful accounts; assets impairments; useful lives of tangible and
intangible assets; pension and postretirement liabilities; tax valuation allowances and unrecognized tax benefits;
reserves for sales returns and allowances; product warranty; product liability; excess and obsolete inventory; and
litigation and environmental exposures.
Concentrations of Credit Risk
Substantially all of the Company’s trade receivables are due from retailers and distributors located
throughout the United States, Europe, Latin America, Canada and Japan. Approximately 20%, 22% and 23% of
the Company’s consolidated net sales in 2007, 2006 and 2005, respectively, were to a single customer who
purchased product from the Company’s three primary business segments: Outdoor Solutions, Consumer
Solutions and Branded Consumables.
Cash and Cash Equivalents
The Company considers highly liquid investments purchased with an original maturity of three months or
less to be cash equivalents.
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.
Leasehold Improvements
Leasehold improvements are recorded at cost less accumulated amortization. Improvements are amortized
over the shorter of the remaining lease term (and any renewal period if such a renewal is reasonably assured at
inception) or the estimated useful lives of the assets.
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