Sunbeam 2011 Annual Report Download - page 41

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Notes to Consolidated Financial Statements
Jarden Corporation Annual Report 2011 (Dollars in millions, except per share data and unless otherwise indicated)
In March 2010, the Securities and Exchange Commission (the “SEC”) provided guidance on certain exchange rate issues specific to
Venezuela. This SEC guidance, in part, requires that any differences between the amounts reported for financial reporting purposes
and actual U.S. dollar-denominated balances that may have existed prior to the application of the highly inflationary accounting
requirements (effective January 1, 2010 for the Company) should be recognized in the income statement. As a result of applying
this SEC guidance, the results of operations for 2010 include a non-cash charge of $56.6 classified in SG&A related to remeasuring
U.S. dollar-denominated assets at the parallel exchange rate and subsequently translating at the official exchange rate. This SEC
guidance was codified by the Financial Accounting Standards Board (the “FASB”) in May 2010, with the issuance of Accounting
Standards Update (“ASU”) 2010-19.
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 consolidated 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 liabilities.
Concentrations of Credit Risk
Substantially all of the Company’s trade receivables are due from retailers and distributors located throughout Asia, Canada,
Europe, Latin America and the United States. Approximately 20%, 21% and 23% of the Company’s consolidated net sales in 2011,
2010 and 2009, respectively, were to a single customer who purchased product from the all of the Company’s business segments.
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.
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 5 to 45 years
Machinery, equipment and tooling (includes capitalized software) 3 to 25 years
Furniture and fixtures 3 to 10 years
Land is not depreciated