Sunbeam 2007 Annual Report Download - page 75

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 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. If the Company concludes
that impairment exists, the carrying amount is reduced to fair value.
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 .............................................. 5to45years
Machinery, equipment and tooling (includes capitalized software) ................. 3to25years
Furniture and fixtures .................................................... 3to10years
Land is not depreciated.
Goodwill and Intangible Assets
Goodwill and certain intangibles (primarily trademarks and tradenames) are not amortized; however, they
are subject to evaluation for impairment using a fair value based test. This evaluation is performed annually or
more frequently if facts and circumstances warrant. 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 goodwill exceeded the implied value. During 2007, 2006 and 2005, the Company did not experience 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 indefinite lives, which are not amortized.
Stock Split
On June 9, 2005, the Company’s Board of Directors declared a 3-for-2 stock split in the form of a stock
dividend of one additional share of common stock for every two shares of common stock, paid 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 share for 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
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