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Note 10 - Fair Value Measurements
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6 Months Ended |
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Jul. 02, 2011
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| Fair Value Disclosures [Text Block] |
Note
10 – Fair Value Measurements
GAAP defines fair
value as the exchange price that would be received for an
asset or paid to transfer a liability (an exit price) in the
principal or most advantageous market for the asset or
liability in an orderly transaction between market
participants on the measurement date. GAAP also established a
fair value hierarchy which requires an entity to maximize the
use of observable inputs and minimize the use of unobservable
inputs when measuring fair value. As of July 2, 2011, the
Company did not have any assets measured at fair value on a
recurring basis that would require disclosure based on the
fair value hierarchy of valuation techniques.
In
addition, certain of our non-financial assets and liabilities
are to be initially measured at fair value on a non-recurring
basis. This includes items such as non-financial assets and
liabilities initially measured at fair value in a business
combination (but not measured at fair value in subsequent
periods) and non-financial, long-lived assets measured at
fair value for an impairment assessment. In general,
non-financial assets and liabilities including goodwill and
property and equipment are measured at fair value when there
is an indication of impairment and are recorded at fair value
only when impairment is recognized.
The
Company’s goodwill is tested for impairment at least on
an annual basis and otherwise when warranted. As of July 2,
2011, the Company determined that based on the operating
results of scott jamestm
for the first six months of 2011, an indicator of impairment
was present. The impairment test involves a comparison of the
fair value of its reporting unit as defined under GAAP to
carrying amounts. If the reporting unit’s aggregated
carrying amount exceeds its fair value, then an indication
exists that the reporting unit’s goodwill may be
impaired. The impairment to be recognized is measured by the
amount by which the carrying value of the reporting unit
being measured exceeds its fair value, up to the total amount
of its assets. Based upon present value tests performed
during the second quarter, the Company recorded an impairment
charge of $1.2 million in connection with the goodwill
related to scott jamestm.
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