CarMax 2014 Annual Report Download - page 56

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52
calculated using the “if-converted” treasury stock method. See Note 13 for additional information on net earnings
per share.
(Y) Recent Accounting Pronouncements
In December 2011, the Financial Accounting Standards Board (“FASB”) issued an accounting pronouncement
related to offsetting of assets and liabilities on the balance sheet (FASB ASC Topic 210). The amendments require
additional disclosures related to offsetting either in accordance with U.S. GAAP or master netting arrangements. In
January 2013, an update was issued to clarify the scope applies to derivatives. The provisions of this
pronouncement and update are effective for fiscal years, and interim periods within those years, beginning after
January 1, 2013. We adopted this pronouncement for our fiscal year beginning March 1, 2013, and there was no
effect on our consolidated financial statements.
In July 2012, the FASB issued an accounting pronouncement related to intangibles – goodwill and other (FASB
ASC Topic 350), which permits companies to first consider qualitative factors as a basis for assessing impairment
and determining the necessity of a detailed impairment test of indefinite-lived intangible assets. The provisions of
this pronouncement are effective for annual and interim impairment tests performed for fiscal years beginning after
September 15, 2012. We adopted this pronouncement for our fiscal year beginning March 1, 2013, and there was no
effect on our consolidated financial statements.
In February 2013, the FASB issued an accounting pronouncement related to comprehensive income (FASB ASC
Topic 220), requiring improved disclosures of reclassifications out of accumulated other comprehensive income.
The provisions of the pronouncement require an entity to report the amounts reclassified, in their entirety, out of
accumulated other comprehensive income and the effect on the respective line items in net income. For amounts not
reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference the
amounts to other related disclosures. This pronouncement is effective for fiscal years, and interim periods within
those years, beginning after December 15, 2012. We adopted this pronouncement for our fiscal year beginning
March 1, 2013, and there was no effect on our consolidated financial statements. The required disclosures have been
adopted in Note 14.
In February 2013, the FASB issued an accounting pronouncement related to liabilities (FASB ASC Topic 405). The
amendments provide guidance on the recognition, measurement and disclosure of obligations resulting from joint
and several liability arrangements, including debt arrangements, other contractual obligations, and settled litigation
and judicial rulings. This pronouncement is effective for fiscal years, and interim periods within those years,
beginning after December 15, 2013. We will adopt this pronouncement for our fiscal year beginning March 1, 2014.
We do not expect this pronouncement to have a material effect on our consolidated financial statements.
In July 2013, the FASB issued an accounting pronouncement related to derivatives and hedging (FASB ASC Topic
815), which allows the use of the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate) as a benchmark
interest rate for hedge accounting purposes in addition to interest rates on direct Treasury obligations of the United States
government and LIBOR. In addition, the guidance removes the restriction on using different benchmark rates for similar
hedges. The pronouncement became effective on a prospective basis for qualifying new or designated hedging
relationships entered into on or after July 17, 2013. It did not have a material effect on our consolidated financial
statements.
In July 2013, the FASB issued an accounting pronouncement related to income taxes (FASB ASC Topic 740),
which provides guidance regarding the presentation of an unrecognized tax benefit when a net operating loss
carryforward, a similar loss or a tax credit carryforward exists. Under certain circumstances, unrecognized tax
benefits should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss
carryforward, a similar tax loss or a tax credit carryforward. This pronouncement is effective for fiscal years, and
interim periods within those years, beginning after December 15, 2013, with early adoption permitted. We will
adopt this pronouncement for our fiscal year beginning March 1, 2014. We do not expect this pronouncement to
have a material effect on our consolidated financial statements.