Cabela's 2011 Annual Report Download - page 88

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78
CABELA’S INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands Except Share and Per Share Amounts)
Fair Value of Financial Instruments – The carrying amount of cash and cash equivalents, accounts
receivable, restricted cash, accounts payable, gift certificates (including credit card loyalty rewards programs),
accrued expenses, short-term borrowings, and income taxes payable included in the consolidated balance sheets
approximate fair value given the short-term nature of these financial instruments. The estimated fair values of
the Company’s long-term debt instruments are based on the amount of future cash flows associated with each
instrument discounted using current borrowing rates for similar debt instruments of comparable maturity.
Comprehensive Income (Loss) – Comprehensive income (loss) consists of net income, derivative
adjustments, unrealized gains and losses on available-for-sale economic development bonds and asset-backed
available-for-sale securities, and foreign currency translation adjustments, net of related income taxes.
Foreign Currency Translation – Assets and liabilities of Cabela’s Canadian operations are translated into
United States dollars at currency exchange rates in effect at the end of a reporting period. Gains and losses from
translation into United States dollars are included in accumulated other comprehensive income (loss) in our
consolidated balance sheets. Revenues and expenses are translated at average monthly currency exchange rates.
Earnings Per Share – Basic earnings per share is computed by dividing net income by the weighted average
number of shares of common stock outstanding during the period. Diluted earnings per share is computed by
dividing net income by the sum of the weighted average number of shares outstanding plus all additional common
shares that would have been outstanding if potentially dilutive common share equivalents had been issued.
2. ACCOUNTING PRONOUNCEMENTS
In January 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update
(“ASU”) No. 2010-06, Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair
Value Measurements. ASU 2010-06 revises two disclosure requirements concerning fair value measurements
and clarifies two others. This statement requires separate presentation of significant transfers into and out of
Levels 1 and 2 of the fair value hierarchy and disclosure of the reasons for such transfers. It also requires the
presentation of purchases, sales, issuances, and settlements within Level 3 on a gross basis rather than a net
basis. The amendments also clarify that disclosures should be disaggregated by class of asset or liability and that
disclosures about inputs and valuation techniques should be provided for both recurring and non-recurring fair
value measurements. These disclosures about fair value measurements and the requirement concerning gross
presentation of Level 3 activity are presented in Note 25. The adoption of this statement had no effect on the
Company’s financial position or results of operations.
In July 2010, the FASB issued ASU No. 2010-20, Disclosures about the Credit Quality of Financing
Receivables and the Allowance for Credit Losses. ASU No. 2010-20 enhances the existing disclosure requirements
providing more transparency of the allowance for loan losses and credit quality of financing receivables. The
disclosures relating to information as of the end of a reporting period and to activity occurring during the reporting
period are presented in Note 5.
Effective April 5, 2011, the FASB issued ASU No. 2011-02, A Creditor’s Determination of Whether
Restructuring is a Troubled Debt Restructuring, which clarifies when a loan modification or restructuring is
considered a troubled debt restructuring. This guidance clarifies what constitutes a concession and whether the
debtor is experiencing financial difficulties, even if not currently in default. An entity should disclose the total
amount of receivables and the allowance for credit losses as of the end of the period of adoption related to those
receivables that are newly considered impaired. The amendments in ASU 2011-02 were effective for the third
quarter of fiscal 2011 for the Company, and were applied retrospectively to modifications occurring on or after the
beginning of fiscal year 2011. The adoption of the provisions of this ASU did not have a material impact on our
financial position or results of operations.