Sunbeam 2014 Annual Report Download - page 43

Jarden Corporation Annual Report 2014 41
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 ows. 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 xtures   3 to 10 years 
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, during the fourth quarter or more frequently if facts and
circumstances warrant. The Company uses a qualitative approach to test goodwill for impairment by rst assessing qualitative factors
to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount as a basis for
determining whether it is necessary to perform the two-step goodwill impairment test. The Company applied this qualitative approach
to select reporting units. For other reporting units, the Company proceeded directly to the rst step of goodwill impairment testing.
The rst step in the goodwill impairment test 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 (see Note
6). The Company uses a qualitative approach to test indenite-lived intangible assets for impairment by rst assessing qualitative
factors to determine whether it is more-likely-than-not that the fair value of an indenite-lived intangible asset is impaired as a basis
for determining whether it is necessary to perform quantitative impairment testing. The Company applied this qualitative approach to
select indenite-lived intangible assets. For other indenite-lived intangible assets, the Company proceeded directly to quantitative
impairment testing. The Company reviews amortizable intangible assets for impairment whenever events or circumstances indicate
that carrying amounts may not be recoverable. If the Company concludes that impairment exists, the carrying amount is reduced to
fair value.
Amortization
Deferred debt issue costs are amortized over the term of the related debt. Identiable intangible assets are recognized apart from
goodwill and are amortized over their estimated, useful lives, except for identiable intangible assets with indenite lives, which are
not amortized.
Revenue Recognition
The Company recognizes revenues at the time of product shipment or delivery, depending upon when title and risk of loss passes, to
unafliated customers, and when all of the following have occurred: a rm sales agreement is in place, pricing is xed 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, discounts and allowances
based upon historical return rates and its reasonable judgment.
The Company sells gift cards to customers in its retail stores, third-party retail stores and through consumer direct operations. Gift
cards do not have an expiration date. At the point of sale of a gift card, the Company records deferred revenue. Gift card revenue
is recognized when the gift card is redeemed by the customer or the likelihood of the gift card being redeemed by the customer is
remote (“gift card breakage”). Gift card breakage income is recognized in proportion to the actual redemption of gift cards based on
the Company’s historical redemption pattern and is included in net sales in the Company’s consolidated statements of operations.
Notes to Consolidated Financial Statements
Jarden Corporation Annual Report 2014 (Dollars in millions, except per share data and unless otherwise indicated)