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Summary of Significant Accounting Policies (Policies) | 6 Months Ended
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Jul. 02, 2011
A) Basis of Presentation | A) Basis of Presentation The condensed consolidated financial statements have been prepared by The Middleby Corporation (the "company" or “Middleby”), pursuant to the rules and regulations of the Securities and Exchange Commission. The financial statements are unaudited and certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the company believes that the disclosures are adequate to make the information not misleading. These financial statements should be read in conjunction with the financial statements and related notes contained in the company's 2010 Form 10-K. The company’s interim results are not necessarily indicative of future full year results for the fiscal year 2011. In the opinion of management, the financial statements contain all adjustments necessary to present fairly the financial position of the company as of July 2, 2011 and January 1, 2011, and the results of operations for the three and six months ended July 2, 2011 and July 3, 2010 and cash flows for the six months ended July 2, 2011 and July 3, 2010.
B) Non-Cash Share-Based Compensation |
| B) | Non-Cash Share-Based Compensation
The company estimates the fair value of market-based stock awards and stock options at the time of grant and recognizes compensation cost over the vesting period of the awards and options. Non-cash share-based compensation expense was $5.3 million and $4.2 million for the second quarter periods ended July 2, 2011 and July 3, 2010, respectively. Non-cash share-based compensation expense was $7.3 million and $7.4 million for the six month periods ended July 2, 2011 and July 3, 2010, respectively.
C) Income Tax Contingencies |
| C) | Income Tax Contingencies
As of January 1, 2011, the total amount of liability for unrecognized tax benefits related to federal, state and foreign taxes was approximately $17.8 million (of which $15.9 million would impact the effective tax rate if recognized) plus approximately $2.1 million of accrued interest and $2.4 million of accrued penalties. The company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense. Interest of $0.1 million and ($0.1) million were recognized in the second quarter of 2011 and 2010, respectively. Penalties of $0.1 million were recognized in both the second quarter of 2011 and 2010. As of July 2, 2011, there were no significant changes in the total amount of liability for unrecognized tax benefits. Although it is reasonably possible that the amounts of unrecognized tax benefits associated with state, federal and foreign tax positions may decrease over the next twelve months due to expiration of a statute or completion of an audit, the company believes such decrease will not be material to the financial statements. The company operates in multiple taxing jurisdictions, both within the United States and outside of the United States, and faces audits from various tax authorities. The company remains subject to examination until the statute of limitations expires for the respective tax jurisdiction. Within specific countries, the company and its operating subsidiaries may be subject to audit by various tax authorities and may be subject to different statute of limitations expiration dates. A summary of the tax years that remain subject to examination in the company’s major tax jurisdictions are:
United States – federal | 2008 - 2010
United States – states | 2003 - 2010
Brazil | 2010
Canada | 2009 - 2010
China | 2002 - 2010
Denmark | 2006 - 2010
Italy | 2008 - 2010
Mexico | 2005 - 2010
Philippines | 2006 - 2010
South Korea | 2005 - 2010
Spain | 2007 - 2010
Taiwan | 2007 - 2010
United Kingdom | 2007 - 2010
D) Fair Value Measures | D) Fair Value Measures Accounting Standards Codification (“ASC”) 820 “Fair Value Measurements and Disclosures,” defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosure about fair value measurements. ASC 820 defines fair value as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 establishes a fair value hierarchy, which prioritizes the inputs used in measuring fair value into the following levels: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Inputs, other than quoted prices in active markets, that are observable either directly or indirectly. Level 3 – Unobservable inputs based on our own assumptions. The company’s financial assets and liabilities that are measured at fair value and are categorized using the fair value hierarchy are as follows (in thousands):
|  | Fair Value |  |  | Fair Value |  |  | Fair Value |  |  |  |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
As of July 2, 2011 |  |  |  |  |  |  |  |  |  |  |  |
Financial Assets: |  |  |  |  |  |  |  |  |  |  |  |
None |  |  | — |  |  |  | — |  |  |  | — |  |  | $ | — |
Financial Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate swaps |  |  | — |  |  | $ | 2,526 |  |  |  | — |  |  | $ | 2,526 |
Contingent consideration |  |  | — |  |  |  | — |  |  | $ | 3,215 |  |  | $ | 3,215 |
As of January 1, 2011 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Financial Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
None |  |  | — |  |  |  | — |  |  |  | — |  |  | $ | — |
Financial Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate swaps |  |  | — |  |  | $ | 2,196 |  |  |  | — |  |  | $ | 2,196 |
Contingent consideration |  |  | — |  |  |  | — |  |  | $ | 5,579 |  |  | $ | 5,579 |
The remaining contingent consideration relates to earnout provisions recorded in conjunction with the acquisition of CookTek LLC.

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- Definition Disclosure of accounting policy for determining the fair value of financial instruments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 107 -Paragraph 8, 10, 12, 13, 14 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6367646&loc=d3e18780-107790 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -URI http://asc.fasb.org/subtopic&trid=2155942 + Details
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