Audiovox 2003 Annual Report Download - page 99

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AUDIOVOX CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
November 30, 2001, 2002 and 2003
(Dollars in thousands, except share and per share data)
undertaken in issuing the guarantee. The initial recognition and
initial measurement provisions of FIN 45 are applicable on a
prospective basis to guarantees issued or modified after December
31, 2002, irrespective of the guarantor's fiscal year end. The
disclosure requirements of FIN 45 are effective for financial
statements of interim or annual periods ending after December 15,
2002. The Company adopted FIN 45 during the quarter ended May 31,
2003. The adoption of FIN 45 did not have a material effect on
the Company's consolidated financial position or results of
operations.
In April 2003, the FASB issued SFAS No. 149 (SFAS No. 149),
"Amendment of Statement 133 on Derivative Instruments and Hedging
Activities". SFAS No. 149 amends and clarifies the accounting
guidance on derivative instruments (including certain derivative
instruments embedded in other contracts) and hedging activities
that fall within the scope of SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities." SFAS No. 149 is
effective for all contracts entered into or modified after June
30, 2003, with certain exceptions, and for hedging relationships
designated after June 30, 2003. The guidance is to be applied
prospectively. The adoption of SFAS No. 149 did not have a
material effect on the Company's financial condition or results
of operations.
In May 2003, the FASB issued SFAS No. 150 (SFAS No. 150),
"Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equity". SFAS No. 150
changes the accounting guidance for certain financial instruments
that, under previous guidance, could be classified as equity or
"mezzanine" equity by now requiring those instruments to be
classified as liabilities (or assets in some circumstances) in
the statement of financial position. Further, SFAS No. 150
requires disclosure regarding the terms of those instruments and
settlement alternatives. SFAS No. 150 is generally effective for
all financial instruments entered into or modified after May 31,
2003, and is otherwise effective at the beginning of the first
interim period beginning after June 15, 2003. The adoption of
SFAS No. 150 did not have a material effect on the Company's
financial condition or results of operations.
In January 2003, the FASB issued FASB Interpretation No. 46 (FIN
46), "Consolidation of Variable Interest Entities, an
Interpretation of ARB No. 51", which addresses consolidation by
business enterprises of variable interest entities (VIEs) either:
(1) that do not have sufficient equity investment at risk to
permit the entity to finance its activities without additional
subordinated financial support, or (2) in which the equity
investors lack an essential characteristic of a controlling
financial interest. In December 2003, the FASB completed
deliberations of proposed modifications to FIN 46 (Revised
Interpretations) resulting in multiple effective dates based on
(Continued)
98