Cricket Wireless 2011 Annual Report Download - page 96

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In June 2011, the FASB issued Accounting Standards Update No. 2011-05, “Comprehensive Income
(Topic 220): Presentation of Comprehensive Income,” (ASU 2011-05). ASU 2011-05 eliminates the option to
report other comprehensive income and its components in the statement of changes in equity. ASU 2011-05
requires that all nonowner changes in stockholders’ equity be presented in either a single continuous statement of
comprehensive income or in two separate but consecutive statements. This new guidance is effective for us
beginning in the first quarter of 2012 and is to be applied retrospectively.
In September 2011, the FASB issued Accounting Standards Update No. 2011-08, “Goodwill Impairment
Testing,” (ASU 2011-08). ASU 2011-08 simplifies the requirements for testing for goodwill impairment and
permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair
value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to
perform the two-step goodwill impairment test as described in the authoritative guidance for goodwill. This new
guidance is effective for us beginning in the first quarter of 2012 and will be applied prospectively. We anticipate
that the adoption of this standard will not materially impact us or our consolidated financial statement footnote
disclosures.
Off-Balance Sheet Arrangements
We do not have and have not had any material off-balance sheet arrangements.
Item 7A. Qualitative and Quantitative Disclosures about Market Risk
Interest Rate Risk
Our senior secured, senior and convertible senior notes all bear interest at fixed rates, and our
non-negotiable promissory note bears interest that varies year to year at rates ranging from approximately 5.0%-
8.3% and compounds annually. As a result, we do not expect fluctuations in interest rates to have a material
adverse effect on our business, financial condition or results of operations.
Our investment portfolio consists of highly liquid, fixed-income investments with contractual maturities of
less than one year. The fair value of such a portfolio is less sensitive to market fluctuations than a portfolio of
longer term securities. Accordingly, we believe that a sharp change in interest rates would not have a material
effect on our investment portfolio.
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