Equifax 2002 Annual Report Download - page 34

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
long-lived assets to be disposed of by sale to include discontinued
operations. The Statement also supersedes Accounting Principles
Board Opinion No. 30 (APB 30), for the disposal of a segment of
business, extending the reporting of a discontinued operation to a
“component of an entity.” Further, the Statement requires operat-
ing losses from a “component of an entity” to be recognized in the
period(s) in which they occur rather than at the measurement date
as had been required under APB 30.
In April 2002, the FASB issued SFAS No. 145, “Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB Statement
No. 13, and Technical Corrections.” SFAS No. 145 amends SFAS
No. 13, “Accounting for Leases,” to eliminate inconsistency
between the required accounting for sale-leaseback transactions
and the required accounting for certain lease modifications that
have economic effects that are similar to sale-leaseback transac-
tions. SFAS No. 145 also rescinds SFAS No. 4, “Reporting Gains
and Losses from Extinguishment of Debt.” Accordingly, gains or
losses from extinguishment of debt shall not be reported as
extraordinary items unless the extinguishment qualifies as an
extraordinary item under the criteria APB Opinion No. 30,
“Reporting the Results of Operations – Reporting the Effects of
Disposal of a Segment of a Business, and Extraordinary, Unusual
and Infrequently Occurring Events and Transactions.” SFAS
No. 145 is effective for fiscal years beginning after May 15, 2002.
We adopted SFAS No. 145 on January 1, 2003.
In June 2002, the FASB issued SFAS No. 146, “Accounting for Costs
Associated with Exit or Disposal Activities.” SFAS No. 146 provides
guidance related to accounting for costs associated with disposal
activities covered by SFAS No. 144 or with exit or restructuring
activities previously covered by Emerging Issues Task Force (“EITF”)
Issue No. 94-3, “Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity (including
Certain Costs Incurred in a Restructuring).” SFAS No. 146 super-
sedes EITF Issue No. 94-3 in its entirety. SFAS No. 146 requires that
costs related to exiting an activity or to a restructuring not be recog-
nized until the liability is incurred. SFAS No. 146 will be applied
prospectively to exit or disposal activities that are initiated after
December 31, 2002. We adopted SFAS No. 146 on January 1, 2003.
In November 2002, the FASB issued FASB Interpretation No. 45
(“FIN 45”), “Guarantor’s Accounting and Disclosure Requirements
for Guarantees, Including Indirect Guarantees of Indebtedness of
Others.” FIN 45 currently requires that a liability be recorded in the
guarantor’s balance sheet upon issuance of a guarantee. In addi-
tion, as of December 31, 2002, FIN 45 requires disclosures about
the guarantees that an entity has issued, including a roll-forward
of the entity’s product warranty liabilities. We adopted the disclo-
sure requirements of FIN 45 effective December 31, 2002 and the
remaining provisions on January 1, 2003 and have included the
required disclosures in the Notes to the 2002 Consolidated
Financial Statements.
In November 2002, the EITF reached a consensus on Issue
No. 00-21, “Revenue Arrangements with Multiple Deliverables.”
EITF Issue No. 00-21 provides guidance on how to account for
arrangements that involve the delivery or performance of multiple
products, services and/or rights to use assets. The provisions of
EITF Issue No. 00-21 will apply to revenue arrangements entered
into in fiscal periods beginning after June 15, 2003 and are not
expected to have a material impact on our financial position or
results of operations.
In December 2002, the FASB issued SFAS No. 148, “Accounting
for Stock-Based Compensation, Transition and Disclosure.” SFAS
No. 148 provides alternative methods of transition for a voluntary
change to the fair value based method of accounting for stock-
based employee compensation. In addition, SFAS No. 148 amends
the disclosure provisions of SFAS No. 123 “Accounting for Stock
Based Compensation” to currently require disclosure in the sum-
mary of significant accounting policies of the effects of an entity’s
accounting policy with respect to stock-based employee compensa-
tion on reported net income and earnings per share in annual and
interim financial statements. SFAS No. 148 does not amend SFAS
No. 123 to require companies to account for their employee stock-
based awards using the fair value method. However, the disclo-
sure provisions are required for all companies with stock-based
employee compensation, regardless of whether they utilize the
fair value method of accounting described in SFAS No. 123 or the
intrinsic value method described in APB Opinion No. 25, “Accounting
for Stock Issued to Employees.” We adopted SFAS No. 148 on
January 1, 2003 and have included the initial required disclosures
in the Notes to the 2002 Consolidated Financial Statements.
In January 2003, the FASB issued FASB Interpretation No. 46
(“FIN 46”), “Consolidation of Variable Interest Entities, an
Interpretation of ARB No. 51.” FIN 46 requires certain variable
interest entities to be consolidated by the primary beneficiary of
the entity if the equity investors in the entity do not have the char-
acteristics of a controlling financial interest or do not have suffi-
cient equity at risk for the entity to finance its activities without
additional subordinated financial support from other parties.
FIN 46 is effective for all new variable interest entities created
or acquired after January 31, 2003. For variable interest entities
created or acquired prior to February 1, 2003, the provisions of
FIN 46 must be applied for the first interim or annual period begin-
ning after June 15, 2003. We are evaluating the impact of FIN 46
on our financial position and results of operations.
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