LOGITECH INTERNATIONAL SA - Shareholder.com
LOGITECH INTERNATIONAL SA - Shareholder.com
LOGITECH INTERNATIONAL SA - Shareholder.com
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Table of Contents<br />
Inventories<br />
<strong>LOGITECH</strong> <strong>INTERNATIONAL</strong> S.A.<br />
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)<br />
Inventories are stated at the lower of cost or market. Cost is <strong>com</strong>puted on a first-in, first-out basis. The Company records write-downs of<br />
inventories which are obsolete or in excess of anticipated demand or market value based on a consideration of product life cycle stage,<br />
technology trends, historical sales, product development plans, <strong>com</strong>ponent cost trends and assumptions about future demand and market<br />
conditions.<br />
Investments<br />
The Company invests in U.S. Government Guaranteed Student Loan Issues, which are auction rate securities collateralized by student<br />
loans and guaranteed by the United States Department of Education. Although the student loans securitizing the auction rate securities have<br />
maturity dates greater than 15 years, these investments are considered highly liquid and typically reset every 28 days. These securities are<br />
classified as available-for-sale as of March 31, 2007 and are reported at fair value with the unrealized gains and losses included as a separate<br />
<strong>com</strong>ponent of shareholders’ equity. As of March 31, 2007, the Company had not recognized any unrealized gains or losses for its auction rate<br />
securities.<br />
The Company also invests in <strong>com</strong>panies in which Logitech owns less than a 20% interest. In accordance with Statement of Financial<br />
Accounting Standards No. 115, “Accounting for Certain Investments in Debt and Equity Securities,” investments with a quoted market value<br />
are classified as available-for-sale. Such investments are reported at fair value with the unrealized gains and losses included as a separate<br />
<strong>com</strong>ponent of shareholders’ equity. Unrealized losses are charged against in<strong>com</strong>e when a decline in fair value is determined to be other than<br />
temporary. Realized gains and losses upon the sale or disposition of such investments are based on the average cost of the specific investments<br />
sold.<br />
The cost method is used for all other investments which are adjusted for any decrease in value deemed to be other than temporary in<br />
nature.<br />
Property, Plant and Equipment<br />
Property, plant and equipment are stated at cost. Additions and improvements are capitalized, and maintenance and repairs are expensed<br />
as incurred. The Company capitalizes the cost of software developed for internal use in connection with major projects. Costs incurred during<br />
the feasibility stage are expensed, whereas costs incurred during the application development stage are capitalized.<br />
With the exception of tooling, depreciation is provided using the straight-line method. Plant and buildings are depreciated over estimated<br />
useful lives from ten to twenty-five years, equipment over useful lives from three to five years, software development over useful lives of three<br />
to five years and leasehold improvements over the life of the lease, not to exceed five years. Tooling is depreciated over the forecasted life of<br />
the tool, not to exceed one year from the time it is placed into production. Depreciation for tooling is calculated based on the forecasted<br />
production volume and adjusted quarterly based on actual production. When property and equipment is retired or otherwise disposed of, the<br />
cost and accumulated depreciation are relieved from the accounts and the net gain or loss is included in the determination of net in<strong>com</strong>e.<br />
Goodwill and Other Intangible Assets<br />
The Company’s intangible assets principally include goodwill, acquired technology, trademarks, customer contracts and customer<br />
relationships and other. Intangible assets with finite lives, which include acquired technology, trademarks, customer contracts and customer<br />
relationships and other, are recorded at cost and amortized using the straight-line method over their useful lives ranging from one month to ten<br />
years. Intangible assets with indefinite lives, which include goodwill, are recorded at cost and evaluated at least annually for impairment.<br />
F-11