Supercuts 2011 Annual Report Download - page 98
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Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
1. BUSINESS DESCRIPTION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
translation account within shareholders' equity. These amounts are presented in the Consolidated Statements of Changes in Shareholders' Equity
and Comprehensive Income.
Derivative Instruments:
The Company may manage its exposure to interest rate and foreign currency risk within the Consolidated Financial Statements through the
use of derivative financial instruments, according to its hedging policy. The Company does not use derivatives with a level of complexity or with
a risk higher than the exposures to be hedged and does not hold or issue derivatives for trading or speculative purposes. The Company currently
has or has had interest rate swaps designated as both cash flow and fair value hedges, treasury locks designated as cash flow hedges, a hedge of
its net investment in its European operations and forward foreign currency contracts designated as cash flow hedges of forecasted transactions
denominated in a foreign currency. Refer to Note 9 to the Consolidated Financial Statements for further discussion.
The Company follows guidance for accounting for derivative instruments and hedging activities, as amended and interpreted, which
requires that all derivatives be recorded on the balance sheet at fair value. This guidance also requires companies to designate all derivatives that
qualify as hedging instruments as fair value hedges, cash flow hedges or hedges of net investments in foreign operations.
94
2011 2010 2009
(Dollars in thousands)
Accumulated Other Comprehensive Income, balance at July 1
$
47,032
$
51,855
$
101,973
Cumulative translation adjustment:
Balance at July 1
57,991
63,407
111,073
Pre
-
tax amount
30,405
(5,416
)
(47,666
)
Tax effect
—
—
—
Net of tax amount
30,405
(5,416
)
(47,666
)
Balance at June 30
88,396
57,991
63,407
Changes in fair market value of financial instruments
designated as cash flow hedges:
Balance at July 1
(8,436
)
(10,903
)
(8,791
)
Pre
-
tax amount
218
3,949
(3,421
)
Tax effect
(86
)
(1,482
)
1,309
Net of tax amount
132
2,467
(2,112
)
Balance at June 30
(8,304
)
(8,436
)
(10,903
)
Recognition of deferred compensation:
Balance at July 1
(2,523
)
(649
)
(309
)
Pre
-
tax amount
609
3,184
(514
)
Tax effect
(232
)
(1,310
)
174
Net of tax amount
377
(1,874
)
(340
)
Balance at June 30
(2,146
)
(2,523
)
(649
)
Accumulated Other Comprehensive Income, balance at June 30
$
77,946
$
47,032
$
51,855