Einstein Bros 2008 Annual Report Download - page 47

Form 10-K
http://www.sec.gov/Archives/edgar/data/949373/000119312509042707/d10k.htm[9/11/2014 10:10:56 AM]
In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities (“SFAS No. 161”). SFAS
No. 161 requires enhanced disclosures about an entity’ s derivative and hedging activities, including (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 (iii) how derivative instruments
and the related hedged item affect an entity’ s results of operations, financial performance, and cash flows. This statement is effective for us on
December 31, 2008. Since SFAS No. 161 requires enhanced disclosures, without a change to existing standards relative to measurement and
recognition, our adoption of SFAS No. 161 will not have any effect on its earnings or financial position.
In April 2008, the FASB issued FASB Staff Position 142-3, Determination of the Useful Life of Intangible Assets (“FSP 142-3”). FSP 142-3
amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized
intangible asset under SFAS No. 142. The objective of FSP 142-3 is to improve the consistency between the useful life of a recognized intangible
asset under SFAS 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS 141(R), Business
Combinations, and other U.S. generally accepted accounting principles. FSP 142-3 will be effective beginning in fiscal year 2010. We are
currently evaluating the impact that FSP 142-3 will have on its financial statements and disclosures.
We have considered all other recently issued accounting pronouncements and do not believe the adoption of such pronouncements will have a
material impact on our consolidated financial statements.
3. ACCOUNTS RECEIVABLE
Accounts receivable consist of the following as of:
January 1,
2008
December 30,
2008
(in thousands of dollars)
Trade receivables $ 3,838 $ 4,499
Franchisee and licensee receivables 2,584 904
Tenant improvement allowance receivable (a) 565 881
Other 1,426 391
Total accounts receivable 8,413 6,675
Less allowance for doubtful accounts 606 216
Accounts receivable, net $ 7,807 $ 6,459
(a) Tenant improvement allowance receivables are payments to be received from lessors related to new leases that we have signed. Pursuant to
SFAS No. 13, we record these as deferred rent and amortize them over the life of the lease.
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Table of Contents
EINSTEIN NOAH RESTAURANT GROUP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
4. INVENTORIES
Inventories, which consist of food, beverage, paper supplies and bagel ingredients, are stated at the lower of cost or market, with cost being
determined by the first-in, first-out method. Inventories consist of the following as of:
January 1,
2008
December 30,
2008
(in thousands of dollars)
Finished goods $ 4,056 $ 4,067
Raw materials 1,257 1,223
Total inventories $ 5,313 $ 5,290
5. PREPAID EXPENSES AND OTHER CURRENT ASSETS
Prepaid expenses and other current assets consist of the following as of:
January 1,
2008
December 30,
2008
(in thousands of dollars)
Prepaid rent $ 2,886 $ 3,153
Prepaid other 880 1,022