Advance Auto Parts 2008 Annual Report Download - page 70

ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
January 3, 2009, December 29, 2007 and December 30, 2006
(in thousands, except per share data)
The accompanying notes to the consolidated financial statements
are an integral part of these statements.
F-16
attempt to improve consistency between the useful life of a recognized intangible asset under SFAS 142 and the
period of expected cash flows used to measure the fair value of the asset under SFAS 141, “Business Combinations.”
The FSP is effective for fiscal years beginning after December 15, 2008, and the guidance for determining the useful
life of a recognized intangible asset must be applied prospectively to intangible assets acquired after the effective
date. The FSP is not expected to have a significant impact on the Company’s financial condition, results of
operations or cash flows.
In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging
Activities - an amendment of SFAS No. 133.” SFAS No. 161 is intended to improve financial standards for
derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better
understand their effects on an entity's financial position, financial performance and cash flows. Entities are required
to provide enhanced disclosures about: (i) how and why an entity uses derivative instruments; (ii) how derivative
instruments and related hedged items are accounted for under SFAS No. 133 and its related interpretations; and (iii)
how derivative instruments and related hedged items affect an entity's financial position, financial performance and
cash flows. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning
after November 15, 2008. The Company is evaluating the impact the adoption of SFAS No. 161 will have on its
consolidated financial statements.
In February 2008, the FASB issued FASB Staff Position No. FAS 157-1, “Application of FASB Statement No.
157 to FASB Statement No. 13 and Other Accounting Pronouncements That Address Fair Value Measurements for
Purposes of Lease Classification or Measurement under Statement 13.” FSP No. FAS 157-1 amends SFAS No. 157,
“Fair Value Measurements,” to exclude SFAS No. 13, “Accounting for Leases,” and other accounting
pronouncements that address fair value measurements for purposes of lease classification or measurement under
SFAS No. 13. However, this scope exception does not apply to assets acquired and liabilities assumed in a business
combination that are required to be measured at fair value under SFAS No. 141 or SFAS No. 141(R), Business
Combinations (revised 2007), regardless of whether those assets and liabilities are related to leases. The FSP will be
effective upon the full adoption of SFAS 157 during the first quarter of fiscal 2009 and will not have a material
impact on the Company’s financial position, results of operations or cash flows.
In December 2007, the FASB issued SFAS No. 141R, “Business Combinations,” which replaces SFAS No.
141, “Business Combinations.” SFAS No. 141R, among other things, establishes principles and requirements for
how an acquirer entity recognizes and measures in its financial statements the identifiable assets acquired, the
liabilities assumed and any controlling interests in the acquired entity; recognizes and measures the goodwill
acquired in the business combination or a gain from a bargain purchase; and determines what information to disclose
to enable users of the financial statements to evaluate the nature and financial effects of the business combination.
Costs of the acquisition will be recognized separately from the business combination. SFAS No. 141R applies to
business combinations for fiscal years beginning after December 15, 2008. The Company will consider this standard
when evaluating potential future transactions to which it would apply.
Effective December 30, 2007, the Company adopted the provisions of SFAS No. 157, “Fair Value
Measurements” on our financial assets and liabilities subject to the deferral provisions of FSP No. 157-2. SFAS No.
157 clarifies the definition of fair value, establishes a framework for defining fair value as it relates to other
accounting pronouncements that require or permit fair value measurements, and expands the disclosures of fair
value measurements. The Company did not apply the provisions of SFAS No. 157 for nonfinancial assets and
liabilities except for those recognized or disclosed on a recurring basis (at least annually) as allowed by the issuance
of FSP No. 157-2. The deferral provided by FSP No. 157-2 applies to such items as (i) nonfinancial assets and
liabilities initially measured at fair value in a business combination (but not measured at fair value in subsequent
periods) and (ii) nonfinancial long-lived asset groups measured at fair value for an impairment assessment. The
Company is evaluating the impact FSP No. 157-2 will have on its nonfinancial assets and liabilities that are
measured at fair value and are recognized or disclosed at fair value on a nonrecurring basis. The adoption of SFAS
157 did not have a material impact on the Company’s financial condition, results of operations or cash flows. The
Company will fully adopt the provisions of SFAS 157 effective during its first quarter of fiscal 2009.