Toro 2011 Annual Report Download - page 56

than not that the fair value of a reporting unit is less than its carry- additional disclosures about an enterprise’s involvement in a VIE.
ing amount as a basis for determining whether it is necessary to The company adopted ASU No. 2009-17 on November 1, 2010, as
perform the two-step goodwill impairment test described in required. The adoption did not have an impact on the company’s
Topic 350, Intangibles – Goodwill and Other. The ‘‘more likely than consolidated financial statements.
not’’ threshold is defined as having a likelihood of more than
50 percent. ASU No. 2011-08 is effective for annual and interim
goodwill impairment tests performed for fiscal years beginning after 2ACQUISITIONS AND DIVESTITURE
December 15, 2011. Early adoption is permitted, including for
annual and interim goodwill impairment tests performed as of a On June 24, 2011, the company completed the acquisition of cer-
date before September 15, 2011, if an entity’s financial statements tain assets of, and assumed certain liabilities from, Lawn Solutions
for the most recent annual or interim period have not yet been Commercial Products, Inc. (‘‘Lawn Solutions’’), a manufacturer of
issued. The company adopted ASU No. 2011-08, as permitted, for turf renovation equipment, including aerators, seeders, power
its annual fiscal year ended October 31, 2011. The adoption did rakes, and brush cutters, for the landscape, rental, municipal, and
not have an impact on the company’s consolidated financial golf markets. On January 17, 2011, the company completed the
statements. acquisition of certain assets of, and assumed certain liabilities
In January 2010, the FASB issued ASU No. 2010-06, Fair Value from, Unique Lighting Systems, Inc. (‘‘Unique Lighting’’), a leading
Measurements and Disclosures (Topic 820). ASU No. 2010-06 manufacturer of professionally installed landscape lighting fixtures
requires new disclosures regarding activity in Level 3 fair value and transformers for residential and commercial use. The aggre-
measurements, including information on purchases, sales, issu- gate net purchase price of these acquisitions during fiscal 2011
ances, and settlements on a gross basis in the reconciliation of was $24,150, which included cash payments, the issuance of
Level 3 fair-value measurements. The company adopted the provi- long-term notes, and estimated earnout considerations. The
sion of ASU No. 2010-06 for Level 3 fair-value measurements for earnout considerations are based on annual financial results over
its second fiscal quarter beginning on January 30, 2011, as certain thresholds as defined in the acquisition agreements.
required. The adoption of ASU No. 2010-06 for Level 3 fair value On October 29, 2010, the company completed the acquisition of
measurements did not have an impact on the company’s certain assets of, and assumed certain liabilities from, one of its
disclosures. independent U.S. Western-based distribution companies. On
In December 2009, the FASB issued ASU No. 2009-16, April 30, 2010, the company completed the purchase of certain
Accounting for Transfers of Financial Assets, which amends assets of, and assumed certain liabilities from, USPraxis, Inc., a
Accounting Standards Codification (‘‘ASC’’) 860, Transfers and manufacturer of stump grinders, wood chippers, and log splitters
Servicing (FASB Statement No. 166, Accounting for Transfers of for rental centers and landscape professionals. On December 1,
Financial Assets an amendment of FASB Statement No. 140).2009, the company’s wholly owned domestic distribution company
ASU No. 2009-16 eliminates the qualifying special purpose entities completed the acquisition of certain assets of, and assumed cer-
from the consolidation guidance and clarifies the requirements for tain liabilities from, one of the company’s independent U.S. Mid-
isolation and limitations on portions of financial assets that are eli- western-based distribution companies. The aggregate net purchase
gible for sale accounting. It also requires additional disclosures price of these acquisitions during fiscal 2010 was $9,137, which
about the risks from continuing involvement in transferred financial included cash payments, the issuance of a long-term note, and an
assets accounted for as sales. The company adopted ASU estimated earnout consideration.
No. 2009-16 on November 1, 2010, as required. The adoption did On October 13, 2009, the company completed the purchase of
not have an impact on the company’s consolidated financial certain assets of, and assumed certain liabilities from, Ty-Crop
statements. Manufacturing Ltd., a leading manufacturer of topdressing and
In December 2009, the FASB issued ASU No. 2009-17, material handling equipment for golf course and sports fields appli-
Improvements to Financial Reporting by Enterprises Involved with cations. The purchase price was $7,900, which included a cash
Variable Interest Entities, which amends ASC 810, Consolidation payment and a long-term note. During the first quarter of fiscal
(FASB Statement No. 167, Amendments to FASB Interpretation 2009, the company also completed the sale of a portion of the
No. 46(R)). ASU No. 2009-17 requires a qualitative analysis to operations of its Midwestern-based company-owned distributorship.
determine the primary beneficiary of a variable interest entity The purchase price of these acquisitions was allocated to the
(‘‘VIE’’). The analysis identifies the primary beneficiary as the identifiable assets acquired and liabilities assumed based on esti-
enterprise that has both the power to direct the activities of a VIE mates of their fair value, with the excess purchase price for acqui-
that most significantly impact the VIE’s economic performance and sitions recorded as goodwill. Additional purchase accounting dis-
the obligation to absorb losses or the right to receive benefits that closures have been omitted given the immateriality of these
could be significant to the VIE. ASU No. 2009-17 also requires acquisitions as compared to the company’s consolidated financial
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