Blizzard 2005 Annual Report Download - page 88
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Please find page 88 of the 2005 Blizzard annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.•A“modifiedretrospective”methodwhichincludestherequirementsofthemodifiedprospectivemethoddescribedabove,butalsopermitsentitiestorestatebased
ontheamountspreviouslyrecognizedunderSFASNo.123forpurposesofproformadisclosureseither(a)allpriorperiodspresentedor(b)priorinterimperiodsof
theyearofadoption.
TheCompanyhasnotyetdeterminedwhichmethoditwilluse.
AspermittedbySFASNo.123,theCompanycurrentlyaccountsforshare-basedpaymentstoemployeesusingOpinion25’sintrinsicvaluemethodand,assuch,generally
recognizes no compensation cost for employee stock options. Accordingly, the adoption of SFAS No. 123R’s fair value method will have a significant impact on the
Company’sresultsofoperations,althoughitwillhavenoimpactonitsoverallfinancialposition.TheimpactofadoptionofSFASNo.123Rcannotbepredictedatthis
timebecauseitwilldependonlevelsofshare-basedpaymentsgrantedinthefuture.
OnNovember24,2004,theFASBissuedStatementNo.151,“InventoryCosts,anAmendmentofARBNo.43,Chapter4”(“SFASNo.151”).Thestandardrequiresthat
abnormalamountsofidlecapacityandspoilagecostswithininventoryshouldbeexcludedfromthecostofinventoryandexpensedwhenincurred.Theprovisionsof
SFASNo.151areapplicabletoinventorycostsincurredduringfiscalyearsbeginningafterJune15,2005.TheCompanyexpectstheadoptionofSFASNo.151willnot
haveamaterialimpactonourfinancialpositionorresultsofoperations.
On December15,2004 theFASB issuedStatementNo. 153(“SFASNo. 153”), “Exchanges of Nonmonetary Assets—an Amendment of Accounting PrinciplesBoard
Opinion No.29.”This standard requiresexchanges of productiveassets to beaccountedfor at fair value,ratherthan at carryoverbasis, unless(1)neither the asset
receivednortheassetsurrenderedhasafairvaluethatisdeterminablewithinreasonablelimitsor(2)thetransactionslackcommercialsubstance.Thenewstandardis
effectivefornonmonetaryassetexchangesoccurringinfiscalperiodsbeginningafterJune15,2005.TheCompanyexpectstheadoptionofSFASNo.153willnothave
amaterialimpactonourfinancialpositionorresultsofoperations.
OnOctober22,2004,thePresidentoftheUnitedStatessignedtheAmericanJobsCreationActof2004(the“Act”).TheActraisesanumberofissueswithrespectto
accountingforincometaxes.ForcompaniesthatpayU.S.incometaxesonmanufacturingactivitiesintheU.S.,theActprovidesadeductionfromtaxableincomeequal
toastipulatedpercentageofqualifiedincomefromdomesticproductionactivities.ThemanufacturingdeductionprovidedbytheActreplacestheextraterritorialincome
(“ETI”)deductioncurrentlyinplace.WecurrentlyderivebenefitsfromtheETIexclusionwhichwasrepealedbytheAct.Ourexclusionforfiscal2005,2006,and2007will
belimitedto95%,75%,and45%oftheotherwiseallowableexclusionandnoexclusionwillbeavailableinfiscal2008andthereafter.TheActalsocreatesatemporary
incentiveforU.S.multinationalstorepatriateaccumulatedincomeearnedabroadbyprovidingan85percentdividendsreceiveddeductionforcertaindividendsfrom
controlledforeigncorporations.Thedeductionissubjecttoanumberoflimitations.TheActalsoprovidesforotherchangesintaxlawthatwillaffectavarietyoftaxpayers.
OnDecember21,2004,theFinancialAccountingStandardsBoard(“FASB”)issuedtwoFASBStaffPositions(“FSP”)regardingtheaccountingimplicationsoftheAct
relatedto(1)thedeductionforqualifieddomesticproductionactivitiesand(2)theone-timetaxbenefitfortherepatriationofforeignearnings.TheFASBdeterminedthat
thedeductionforqualifieddomesticproductionactivitiesshouldbeaccountedforasaspecialdeductionunderFASBStatementNo.109,“AccountingforIncomeTaxes.”
TheFASBalsoconfirmed,thatupondecidingthatsomeamountofearningswillberepatriated,acompanymustrecordinthatperiodtheassociatedtaxliability.The
guidanceintheFSPsappliestofinancialstatementsforperiodsendingafterthedatetheActwasenacted.WeareevaluatingtheActatthistimeandhavenotyetdeter-
minedwhetherwewillavailourselvesoftheopportunityoftheone-timetaxbenefitfortherepatriationofforeignearnings.Weplantocompleteourassessmentbefore
theendoffiscal2006andarenotcurrentlyinapositiontoestimatearangeofpossiblerepatriationamounts.
20. SUBSEQUENT EVENTS
OnApril4,2005,weheldaSpecialMeetingofStockholdersinSantaMonica,California.Oneitemwassubmittedtoavoteofthestockholders:Toapproveanamendment
totheCompany’sAmendedandRestatedCertificateofIncorporation,asamended,toincreasethenumberofauthorizedsharesofcommonstockfrom225,000,000to
450,000,000.TheamendmenttotheCompany’sAmendedandRestatedCertificateofIncorporation,asamended,toincreasethenumberofauthorizedsharesofcommon
stockfrom225,000,000to450,000,000wasapproved.
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Activision, Inc. — 2005 Annual Report