2K Sports 2009 Annual Report Download - page 90

3. FAIR VALUE MEASURES
As of November 1, 2008, we adopted the guidance for Fair Value Measurements which establishes a three-
level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires
entities to maximize the use of ‘‘observable inputs’’ and minimize the use of ‘‘unobservable inputs.’’ The
three levels of inputs used to measure fair value are as follows:
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significant to the fair value of the assets or liabilities. This includes certain pricing models,
discounted cash flow methodologies and similar techniques that use significant unobservable inputs.
The table below segregates all financial assets and liabilities that are measured at fair value on a recurring
basis into the most appropriate level within the fair value hierarchy based on the inputs used to determine
the fair value at the measurement date.
Quoted prices
in active markets Significant other Significant unobservable
for identical assets observable inputs inputs
October 31, 2009 (level 1) (level 2) (level 3)
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4. BUSINESS ACQUISITIONS AND CONSOLIDATION
We consummated the acquisitions described below, which largely reflect our strategy to diversify our
business by adding experienced development studios, intellectual properties and talented personnel
resources to our existing infrastructure. The acquisitions were not considered to be material to our
consolidated statements of operations, individually or in the aggregate. The results of operations and
financial positions of these acquisitions are included in our consolidated financial statements from their
respective acquisition dates forward and therefore affect comparability from period to period. During the
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Cash and Goodwill
Development Value of Recorded on Identified
Acquisition Advances Stock Acquisition Intangible
Acquired Business Date Paid Issued Date Assets Contingent Consideration
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sales.
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the acquisition. The terms of the transaction also include additional contingent deferred payments of up to
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