Classmates.com 2008 Annual Report Download - page 78

Table of Contents
Disclosures about Derivative Instruments and Hedging Activities
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 changed the disclosure requirements for derivative instruments and hedging activities. 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 encourages, but does not require, presenting disclosures for earlier
periods for comparative purposes at initial adoption. SFAS No. 161 is effective for financial statements issued for fiscal years and interim
periods beginning after November 15, 2008, with early application encouraged. We adopted SFAS No. 161 on January 1, 2009. Because SFAS
No. 161 amended only the disclosure requirements for derivative instruments and hedged items, the adoption of SFAS No. 161 will only affect
the disclosure in our consolidated financial statements.
Determination of the Useful Life of Intangible Assets
In April 2008, the FASB issued FASB Staff Position ("FSP") No. FAS 142-3, Determination of the Useful Life of Intangible Assets ("FSP
142-3"). This guidance is intended to improve the consistency between the useful life of a recognized intangible asset under SFAS No. 142,
Goodwill and Other Intangible Assets , and the period of expected cash flows used to measure the fair value of the asset under SFAS No. 141(R)
when the underlying arrangement includes renewal or extension of terms that would require substantial costs or result in a material modification
to the asset upon renewal or extension. Companies estimating the useful life of a recognized intangible asset must now consider their historical
experience in renewing or extending similar arrangements or, in the absence of historical experience, must consider assumptions that market
participants would use about renewal or extension as adjusted for the entity-specific factors in SFAS No. 142. FSP 142-3 was effective for us
beginning January 1, 2009. We do not expect the adoption of FSP FAS 142-
3 to have a material impact on our consolidated financial statements.
Determining Whether Instruments Granted in Share
-Based Payment Transactions are Participating Securities
In June 2008, the FASB issued FSP EITF Issue No. 03-6-1, Determining Whether Instruments Granted in Share-Based Payment
Transactions Are Participating Securities ("FSP EITF 03-6-1"), in which the FASB concluded that all outstanding unvested share-based
payment awards that contain rights to nonforfeitable dividends (such as restricted stock units) are considered participating securities. Because the
awards are considered participating securities, the issuing entity is required to apply the two-class method of computing basic and diluted
earnings per share. The provisions of FSP EITF 03-6-1 were effective for us beginning January 1, 2009 and, in 2009, will be applied
retroactively to all prior-period earnings per share computations. We are currently evaluating the impact of the adoption of FSP EITF 03-6-1 on
our earnings per share amounts.
Inflation
Inflation did not have a material impact on our consolidated results of operations during the years ended December 31, 2008, 2007 and
2006, and we do not currently anticipate that inflation will have a material impact on our consolidated results of operations for year ending
December 31, 2009.
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