Adaptec 2006 Annual Report Download - page 78
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Table of Contents
guidelines for measuring fair value and expands disclosures regarding fair value measurements. SFAS 157 does not require any new fair value measurements but
rather eliminates inconsistencies in guidance found in various prior accounting pronouncements. SFAS 157 is effective for fiscal years beginning after
November 15, 2007. The Company expects that adoption of SFAS 157 will not have a material impact on its financial condition or results of operations.
In September 2006, the Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin No. 108 (SAB 108). SAB 108 provides guidance on the
consideration of the effects of prior year misstatements in quantifying current year misstatements for the purpose of a materiality assessment. SAB 108 permits
existing public companies to record the cumulative effect of initially applying this approach in the fiscal year ending after November 15, 2006 by recording
necessary correcting adjustments to the carrying values of assets and liabilities as of the beginning of that year with the offsetting adjustment recorded to the
opening balance of retained earnings. Adoption of SAB 108 did not have a material impact on its financial condition and results of operations.
Reclassifications. Certain prior year amounts have been reclassified in order to conform to the 2006 presentation.
NOTE 2. Restatement of Consolidated Financial Statements
In August 2006, the Audit Committee of the Company completed a review of the Company’s stock option-award practices. Based on the results of the review,
the Company concluded that, pursuant to the requirements of Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (APB 25)
that were in effect prior to 2006, the accounting measurement dates for certain stock option grants awarded during the years 1998-2001 differ from the
measurement dates previously used to determine any stock-based compensation expense for the years 1998-2002. The Company determined that for certain
option grants the allocations to individual recipients and/or the proper documentation of formal corporate approvals had not been completed as of the dates
originally used for accounting measurement. As a result, new accounting measurement dates were applied to the affected option grants. A summary of the
adjustments by type is as follows:
• Stock-based compensation expense of $44.7 million was recorded with respect to nine stock option grants to Section 16 Officers
(executives) and non-executives that were approved by unanimous written consents (“UWCs”) or other
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Source: PMC SIERRA INC, 10-K, March 01, 2007 Powered by Morningstar® Document Research℠