Wiley GAAP: Financial Statement Disclosure Manual - Joanne M. Flood

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(5,000) (1,500) (3,500) realized in net income Net unrealized holding gains 20,000 6,000 14,000 Cash flow hedges: Net derivative losses arising during the period (16,000) 4,800 (11,200) Plus: Reclassification adjustment for losses realized in net income 25,875 (6,913) 18,113 Net effects of cash flow hedges 9,875 (2,113) 6,913 Defined benefit plans: Prior service cost from plan amendment during the period (5,800) (1,640) (4,200) Less: amortization of prior service cost included in net periodic pension cost 1,800 640 700 Net prior service cost during the period (4,000) (1,000) (3,500) Net loss arising during the period (2,500) ( 950) (1,040) Defined benefit plans, net (6,500) (1,950) (4,540) Other comprehensive income $40,375 $12,112 $28,263

      In May 20X1, the Company experienced a fire that damaged certain inventory and machinery and equipment at the production facility in Raleigh, North Carolina. The fire occurred after business hours and was fully extinguished quickly, with no injuries. The plant was back in full operation shortly thereafter with no significant disruption in supply or service to customers. The Company maintains adequate insurance coverage for its operations.

      The total amount of the loss related to assets and the related expenses was $2,690,000. The majority of the Company's insurance claim relates to the recovery of damaged inventory. Through payments received in May 20X2 and March 20X3, the Company has recorded approximately $2,397,000 as a partial payment on the claim. This resulted in no gain or loss being recognized. As of December 31, 20X3, the Company reflects a receivable from the insurance company relating to this claim of $285,000, net of $232,000, and represents additional proceeds to be received. The deductible charge was expenses in Fiscal Year 20X1, as a component of cost of goods sold in the statement of operations and comprehensive income.

      In February 20X3, the Company received $8.3 million from Blake MedTech, Inc. to satisfy the May 20X0 jury award of damages for infringement of the Company's heart monitor. For further information, see Note X.

      On June 23, 20X1, an accidental gas explosion occurred at our manufacturing facility in Waco, Texas (“the Waco accident”). This facility was the primary production facility for the NutraBar brand. During fiscal 20X3, the Company settled its property and business interruption claims related to the Garner accident with our insurance providers. The total payments received from the insurers in fiscal 20X3 were $278.6 million and all previously deferred balances were immediately recognized upon settlement of the insurance claim in fiscal 20X3. The insurance recoveries recognized in fiscal 20X3, included in selling, general and administrative expenses totaled $132.6 million, representing $95 million in reimbursement for business interruption, a $32.4 million gain on involuntary conversion of property, plant and equipment and recovery of other expenses incurred of $5.2 million.

      A severe rainy season affected many parts of Mississippi in December 20X0 and caused the company to case manufacturing at its facility in Mississippi dues to a breach of a levy and flooding at the industrial park where the facility is located. The Company established temporary offices and worked with customers to meet critical needs through other manufacturing facilities. The facility re‐established manufacturing operations on April 2, 20X1.

      The Company maintains property and business interruption insurance policies. On February 4, 20X1, the Company filed a $5.0 million claim under one of its insurance policies to cover both the property damage and the business interruption. The policy had a $1.0 million deductible. In fiscal 20X1, the Company collected $4.0 million as settlement of the claim under the policy.

      The Company included in Operating income (loss) for fiscal year 20X1 the $4.0 million of insurance proceeds related to recovery of certain losses recognized for property damage and business interruption experienced by the Company. Of the $4.0 million recorded for fiscal 20X1, $3.0 million were recorded in cost of goods sold and $1.0 million were recorded in Selling, general, and administrative expenses in order to offset the recognized losses.

      1 1 Application of Regulations S-X (17 CFR PART 210) can be found on the ecfr.gov website.

      2 2 This bulleted item is effective upon implementation of ASU 2017‐12.

      3 3 Upon implementation of ASU 2016‐13, this reference will change to ASC 326‐30‐35‐2.

      4 4

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