Company: ICUI
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0000883984-25-000007
Chunk: 208

Company: ICU MEDICAL INC/DE
Filing Date: 2025-02-27
Form: 10-K
Item: Item 1
Chunk 208
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 benefit that is greater than 50% likely of being realized upon ultimate settlement. We have accrued for interest and penalties of $2.6 million and $1.6 million, respectively, as of December 31, 2024 and $2.9 million and $2.0 million, respectively, as of December 31, 2023.Foreign CurrencyGenerally, the functional currency of our international subsidiaries is the local currency. Generally, we translate the financial statements of these subsidiaries to U.S. dollars at the exchange rate in effect at the balance sheet date and revenues and expenses are translated at the average monthly exchange rates during the year. Certain of our international subsidiaries consolidate first with another subsidiary that utilizes a functional currency other than U.S. dollars. In those cases, we follow a step by step translation process utilizing the same sequence as the consolidation process. Translation adjustments are recorded as a component of accumulated other comprehensive loss, a separate component of stockholders' equity on our consolidated balance sheets and the effect of exchange rate changes on cash and cash equivalents are reflected on our consolidated statements of cash flows. Gains and losses for transactions denominated in a currency other than the functional currency of the entity are included in our consolidated statements of operations in other expense, net (see Other expense, net table below). Foreign currency transaction losses, net were $9.8 million, $5.9 million and $5.8 million in 2024, 2023 and 2022, respectively.Revenue RecognitionWe recognize revenues when we transfer control of promised goods to our customers, which for the majority of our sales of products sold on a standalone basis to our distributors and end customers for direct sales, is deemed to be at point of shipment. Our software license renewals are considered to be transferred to a customer at a point in time at the start of each renewal period, therefore revenue is recognized at that time. Payment is typically due in full within 30 days of delivery or the start of the contract term. Revenue is recorded in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. We include variable consideration in net sales only to the extent that a significant reversal in revenue is not probable when the uncertainty is resolved.Our variable consideration includes distributor chargebacks, product returns and end customer rebates, with distributor chargebacks representing the majority and subject to the greatest judgment.Chargebacks are the difference between the prices we charge our distribution customers at the time they purchase our products and the