Barnes and Noble 2010 Annual Report Download - page 50

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Fair Value Measurement Using
Description Year Ended May 1, 2010
Quoted Prices in Active
Markets for Identical
Assets
(Level 1)
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable Inputs
(Level 3) Total Gains (Losses)
Contingent consideration
(See Note 6) $ 8,165 8,165 (1,712)
Fair Value of Financial Instruments
The Company’s financial instruments, other than those
presented in the disclosures above, include cash, receiv-
ables, other investments, accounts payable and accrued
liabilities. The fair values of cash, receivables, accounts
payable and accrued liabilities approximated carrying val-
ues because of the short-term nature of these instruments.
The Company believes that its Credit Facility approximates
fair value since interest rates are adjusted to reflect current
rates. The Company believes that the terms and conditions
of the Seller Notes are consistent with comparable market
debt issues.
11. NET EARNINGS (LOSS) PER SHARE
In accordance with ASC 260-10-45, Determining Whether
Instruments Granted in Share-Based Payment Transactions Are
Participating Securities, the Company’s unvested restricted
shares and shares issuable under the Company’s deferred
compensation plan are considered participating securities.
During periods of net income, the calculation of earnings
per share for common stock are reclassified to exclude the
income attributable to the unvested restricted shares and
shares issuable under the Company’s deferred compensa-
tion plan from the numerator and exclude the dilutive
impact of those shares from the denominator. During
periods of net loss, no effect is given to the participating
securities because they do not share in the losses of the
Company. Due to the net loss for the period, participating
securities in the amounts of 2,118,604 were excluded in
the calculation of earnings per share using the two-class
method for the transition period because the effect would
be antidilutive. The Company has retroactively applied the
provisions of ASC 260-10-45 to the financial information
included for fiscal 2008 and 2007.
48 Barnes & Noble, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued