First Data 2007 Annual Report Download - page 195

Chase Paymentech
NOTES TO COMBINED FINANCIAL STATEMENTS – CONTINUED
For the years ended December 31, 2007 and 2006 and
the year ended December 31, 2005 (unaudited)
has taken or expects to take on a tax return. FIN 48 defines the threshold for recognizing tax return positions in the financial statements as "more likely than
not" that the position is sustainable, based on its merits. FIN 48 also provides guidance on the measurement, classification and disclosure of tax return
positions in the financial statements. FIN 48 is effective for nonpublic enterprises for fiscal years beginning after December 15, 2007, with the cumulative
effect of the change in accounting principle recorded as an adjustment to the beginning balance of retained earnings in the period of adoption. The Company
plans to adopt this interpretation in 2008 and is currently evaluating the impact of implementing FIN 48 on its combined financial statements.
Fair Value Measurements
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. This statement defines fair value, establishes a fair value hierarchy to be used
in U.S. GAAP, and expands disclosures about fair value measurements. Although this statement does not require any new fair value measurements, the
application could change current practice. The statement is effective for recurring fair value measurements of assets and liabilities for fiscal years beginning
after November 15, 2007, and for nonrecurring measurements of nonfinancial assets and liabilities for fiscal years beginning after November 15, 2008. The
Company is currently evaluating the impact of implementing this statement on its combined financial statements.
The Fair Value Option
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities – Including an Amendment of FASB
Statement No. 115 (SFAS 159). SFAS 159 gives entities the ability to elect to measure many financial instruments and certain other items at fair value. The
fair value election is made on an instrument by instrument basis and is irrevocable. Unrealized gains and losses on items elected for fair value accounting are
reported in earnings at each subsequent reporting date. SFAS 159 is effective for fiscal years beginning after November 15, 2007. At this time, the Company
does not anticipate electing the fair value option.
Business Combinations
In December 2007, the FASB issued SFAS No. 141(R), Business Combinations (SFAS 141R). Under Statement 141R, an acquiring entity will be required to
recognize all the assets acquired, liabilities assumed, and noncontrolling interests at the acquisition-date fair value. These acquisition-date fair value
provisions apply to contingent consideration, in-process research and development and acquisition contingencies. The new standard also requires expensing
associated acquisition costs and restructuring charges. SFAS 141R is effective as of the beginning of the first annual reporting period beginning on or after
December 15, 2008. The Company plans to adopt the provisions of this statement prospectively for business combinations with closing dates after January 1,
2009.
Noncontrolling Interests
In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements—An Amendment of ARB No. 51 (SFAS
160). SFAS 160 establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. This
standard requires the recognition of a noncontrolling interest (minority interest) as a component of equity in the consolidated financial statements and separate
from the parent's equity. The amount of net income attributable to the noncontrolling interest will be included in consolidated net income on the face of the
income statement. SFAS 160 is effective for the Company's fiscal year beginning after December 15, 2008, and will be applied prospectively except for the
presentation and disclosure requirements, which must be applied retrospectively for all periods presented. The Company is currently evaluating the impact
that adopting SFAS 160 will have on its combined financial statements.
NOTE 4 – PROPERTY AND EQUIPMENT
A summary of property and equipment by major class as of December 31, 2007 and 2006 is as follows (in thousands):
2007 2006
Furniture and equipment $ 179,343 $ 153,266
Capitalized software 103,765 92,809
Leasehold improvements 14,364 12,005
297,472 258,080
Less accumulated depreciation and amortization (194,440) (173,788)
Property and equipment, net $ 103,032 $ 84,292
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