COST Financial_Report

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Unformatted text preview: thorities in connection with ongoing income ta x a udits a nd long term deferred ta x a ssets. The Compa ny a djusts the ca rrying va lue of its employee life insura nce contra cts to the net ca sh surrender va lue a t the end of ea ch reporting period. Goodwill resulting from certa in business combina tions is reviewed for impa irment in the fourth qua rter of ea ch fisca l yea r, or more frequently if circumsta nces dicta te. No impa irment of goodwill ha s been incurred to da te.</font></p> <p style=3D'MARGIN-TOP: 18px <p style=3D'MARGIN-TOP: 6 px <font style=3D'FONT-FAMILY: ARIAL' siz e=3D2>The Compa ny&#x2019 ba nking system provides for the da ily replenishment of ma jor ba nk a ccounts a s checks a re presented. Included in a ccounts pa ya ble a t the end of 2012 a nd 2011 a re $56 5 a nd $108, respectively, representing the excess of outsta nding checks over ca sh on deposit a t the ba nks on which the checks were dra wn.</font></p> <p style=3D'MARGIN-TOP: 18px Lia bilities</i></font></p> <p style=3D'MARGIN-TOP: 6 px <font style=3D'FONT-FAMILY: ARIAL' siz e=3D2>The Compa ny uses a combina tion of insura nce a nd self-insura nce mecha nisms, including a wholly-owned ca ptive insura nce subsidia ry a nd pa rticipa tion in a reinsura nce pool, to provide for potentia l lia bilities for workers&#x2019 directors&#x2019 a nd employee hea lth ca re benefits. The reinsura nce a greement is one yea r in dura tion a nd new a greements a re entered into by ea ch pa rticipa nt a t their discretion a t the commencement of the next fisca l yea r. Lia bilities a ssocia ted with the risks tha t a re reta ined by the Compa ny a re not discounted a nd a re estima ted, in pa rt, by considering historica l cla ims experience, demogra phic fa ctors, severity fa ctors, a nd other a ctua ria l a ssumptions. The estima ted a ccrua ls for these lia bilities could be significa ntly a ffected if future occurrences a nd cla ims differ from these a ssumptions a nd historica l trends. As of the end of 2012 a nd 2011, these insura nce lia bilities were $6 88 a nd $59 5 in the a ggrega te, respectively, a nd were included in a ccounts pa ya ble, a ccrued sa la ries a nd benefits, a nd other current lia bilities on the consolida ted ba la nce sheets, cla ssified ba sed on their na ture.</font></p> <p style=3D'MARGIN-TOP: 12px <font style=3D'FONT-FAMILY: ARIAL' siz e=3D2>The Compa ny&#x2019 wholly-owned ca ptive insura nce subsidia ry (the ca ptive) receives direct premiums, which a re netted a ga inst the Compa ny&#x2019 premium costs in selling, genera l a nd a dministra tive expenses, in the consolida ted sta tements of income. The ca ptive pa rticipa tes in a reinsura nce progra m tha t includes other third-pa rty members. The member a greements a nd pra ctices of the reinsura nce progra m limit a ny pa rticipa ting members&#x2019 a djustments rela ted to the reinsura nce progra m a nd rela ted impa cts to the consolida ted ba la nce sheets a re recogniz ed a s informa tion becomes known. In the event the Compa ny lea ves the reinsura nce progra m, the Compa ny is not relieved of its prima ry obliga tion to the policyholders for a ctivity prior to the termina tion of the a nnua l a greement.</font></p> <p style=3D'MARGIN-TOP: 18px Lia bilities</i></font></p> <p style=3D'MARGIN-TOP:...
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This document was uploaded on 04/07/2014.

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