Annual report pursuant to Section 13 and 15(d)

Note 2 - Basis of Presentation

v3.20.2
Note 2 - Basis of Presentation
 12 Months Ended
Jun. 30, 2020
Notes to Financial Statements  
Business Description and Basis of Presentation [Text Block]
(
2
)
Basis of Presentation
 
Principles of Consolidation.
Ethan Allen conducts business globally and has strategically aligned its business into
two
reportable segments: Wholesale and Retail. These
two
segments represent strategic business areas of our vertically integrated enterprise that operate separately and provide their own distinctive services. The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. Our consolidated financial statements also include the accounts of an entity in which we are a majority shareholder with the power to direct the activities that most significantly impact the entity's performance. Noncontrolling interest amounts in the entity are immaterial and included in the Consolidated Statements of Comprehensive Income within
I
nterest
(expense), net of interest income
. All intercompany activity and balances have been eliminated from the consolidated financial statements.
 
Use of Estimates.
We prepare our consolidated financial statements in accordance with U.S. GAAP, which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of net sales and expenses during the reporting period. Due to the inherent uncertainty involved in making those estimates, actual results could differ from those estimates. Areas in which significant estimates have been made include, but are
not
limited to, goodwill and indefinite-lived intangible asset impairment analyses, useful lives for property, plant and equipment, inventory obsolescence, lease accounting, business insurance reserves, tax valuation allowances and the evaluation of uncertain tax positions.
 
Reclassifications.
Certain reclassifications have been made to prior years' financial statements to conform to the current year's presentation. These changes were made for disclosure purposes only and did
not
have any impact on previously reported results.
 
The Company has evaluated subsequent events through the date that the financial statements were issued.