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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2013

Inventories. Inventories are stated at the lower of cost or market, determined by the first-in, first-out method and consist of the following:



	December 31,
(in millions)	2013		2012
Finished goods	$	126.7	$	68.5
Work-in-process	10.0		7.9
Raw materials and supplies	62.5		16.6
	$	199.2	$	93.0

Schedule of property, plant and equipment

Property, plant and equipment are carried at cost at acquisition date and are depreciated using the straight-line method over their estimated useful lives as follows:



	Estimated Useful Lives (in years)
Buildings	25-30
Computer equipment and software	3-5
Leasehold improvements	4-7
Machinery equipment	3-7
Office furniture and fixtures	5-7

Changes in accrued sales returns

The Company had the following activity for accrued sales returns from December 31, 2011 to December 31, 2013:



(in millions)
Balance as of December 31, 2011	$	5.3
Amounts accrued	45.4
Returns charged to accrual	(45.6		)
Balance as of December 31, 2012	5.1
Amounts accrued	104.8
Liabilities assumed as a result of acquisition	19.9
Returns charged to accrual	(101.1		)
Balance as of December 31, 2013	$	28.7

Schedule of warranty terms [Table Text Block]

The following summarizes the Company’s warranty terms:



Segment	Product/Brand	Warranty Term (in years)
Tempur North America	Mattresses	25, prorated ⁽¹⁾
Tempur North America	Pillows	3
Tempur International	Mattresses	15, prorated ⁽¹⁾
Tempur International	Pillows	3
Sealy	Mattresses	10 - 25, prorated ⁽²⁾


(1)	The last 10 years of warranty period are prorated on a straight-line basis.


(2)	Products have various warranty terms, generally non-prorated for the first 10 to 15 years and then prorated for the balance of the warranty term.

Warranty activity

The Company had the following activity for warranties from December 31, 2011 to December 31, 2013:



(in millions)
Balance as of December 31, 2011	$	4.3
Amounts accrued	6.0
Warranties charged to accrual	(5.5		)
Balance as of December 31, 2012	4.8
Amounts accrued	22.7
Liabilities assumed as a result of acquisition	21.4
Warranties charged to accrual	(22.8		)
Balance as of December 31, 2013	$	26.1

- Definition

Tabular disclosure of the useful life and salvage value of long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software.

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