2K Sports 2009 Annual Report Download - page 87

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Comprehensive income (loss) is defined to include all changes in equity except those resulting from
investments by owners and distributions to owners. The Company’s items of accumulated other
comprehensive income (loss) are foreign currency translation adjustments, which relate to investments that
are permanent in nature and therefore do not require tax adjustments.
Recently Issued Accounting Pronouncements
Fair Value Measurements
In November 2008, the Company adopted the guidance as it pertains to the accounting for financial assets
and liabilities as well as other assets and liabilities carried at fair value on a recurring basis. The adoption
of this guidance did not affect the Company’s historical consolidated financial statements. For more
information, see Note 3. On November 1, 2009 the Company intends on adopting the guidance related to
fair value measurements pertaining to non-financial assets and liabilities on a prospective basis. This
guidance established the authoritative definition of fair value, set out a framework for measuring fair value
and expanded the required disclosures about fair value measurement. We have evaluated the non-financial
assets and liabilities portion of the guidance and expect that it will have no significant impact on our
consolidated financial position or results of operations.
Research and Development
In November 2008, the Company adopted the guidance related to accounting for the non-refundable
portion of a payment made by a research and development entity for future research and development
activities. Under this guidance an entity is required to defer and capitalize non-refundable advance
payments made for research and development activities until the related goods are delivered or the related
services are performed. The adoption did not have a material effect on our consolidated financial position,
cash flows or results of operations.
Business Combinations
In December 2007, new guidance was issued providing greater consistency in the accounting and financial
reporting of business combinations. It requires the acquiring entity in a business combination to recognize
all assets acquired and liabilities assumed in the transaction, establishes the acquisition-date fair value as
the measurement objective for all assets acquired and liabilities assumed, and requires the acquirer to
disclose the nature and financial effect of the business combination. The guidance is effective for all fiscal
years beginning after December 15, 2008 (November 1, 2009 for the Company) and interim periods within
those years, with earlier adoption prohibited. We do not expect that the adoption of this standard will have
an impact on our historical consolidated financial position, cash flows or results of operations.
In April 2009, additional guidance was issued which requires that assets acquired and liabilities assumed in
a business combination that arise from contingencies to be recognized at fair value, if fair value can be
determined during the measurement period. This new rule specifies that an asset or liability should be
recognized at time of acquisition if the amount of the asset or liability can be reasonably estimated and that
it is probable that an asset existed or that a liability had been incurred at the acquisition date. This new rule
is effective for all fiscal years beginning after December 15, 2008 (November 1, 2009 for the Company).
Intangibles—Goodwill and Other
In April 2008, new guidance was issued for determining the useful life of a recognized intangible asset
which applies prospectively to intangible assets acquired individually or with a group of other assets in
either an asset acquisition or business combination. These new rules are effective for fiscal years, and
interim periods within those fiscal years, beginning after December 15, 2008 (November 1, 2009 for the
Company), and early adoption is prohibited. We do not expect that the adoption will have a material effect
on our consolidated financial position, cash flows or results of operations.
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