GNC 2010 Annual Report Download - page 90

Table of Contents
GENERAL NUTRITION CENTERS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Business Combinations and Consolidation
In December 2007, the FASB issued a new standard on business combinations. This new standard establishes principles and
requirements for how an acquirer in a business combination recognizes and measures in its financial statements the identifiable assets
acquired, the liabilities assumed and any noncontrolling interest in the acquiree at the acquisition date fair value. The new standard significantly
changes the accounting for business combinations in a number of areas, including the treatment of contingent consideration, preacquisition
contingencies, transaction costs, in-process research and development and restructuring costs. In addition, under this standard, changes in an
acquired entity's deferred tax assets and uncertain tax positions after the measurement period will impact the acquirer's income tax expense.
The standard provides guidance regarding what information to disclose to enable users of the financial statements to evaluate the nature and
financial effects of the business combination. The original standard became effective for fiscal years beginning after December 15, 2008 with
early application prohibited and amends the standard on income taxes such that adjustments made to deferred taxes and acquired tax
contingencies after January 1, 2009, even for business combinations completed before this date, will impact net income. The Company
adopted this new standard during the first quarter of fiscal 2009; the adoption did not have any impact on its consolidated financial statements.
In December 2007, the FASB issued a new standard on consolidation. The issuance of this new standard changes the accounting and
reporting for minority interests, which have been recharacterized as noncontrolling interests and classified as a component of equity. This new
consolidation method significantly changes the accounting for transactions with minority interest holders. The standard was effective for fiscal
years beginning after December 15, 2008 with early application prohibited. The Company adopted this new standard during the first quarter of
fiscal 2009; the adoption did not have any impact on its consolidated financial statements.
In June 2009, the FASB issued an update to the standard on consolidations. The standard is intended to improve financial reporting by
providing additional guidance to companies involved with variable interest entities and by requiring additional disclosures about a company's
involvement in variable interest entities. This standard is effective for interim and annual periods ending after January 1, 2010. The adoption of
this standard will not have any impact on the Company's financial statements.
Other
In March 2008, the FASB issued a new standard on derivatives and hedging. The new standard requires companies with derivative
instruments to disclose information that should enable financial statement users to understand how and why a company uses derivative
instruments, how derivative instruments and related hedged items are accounted for and how derivative instruments and related hedged items
affect a company's financial position, financial performance, and cash flows. The new standard was effective for interim and annual periods
beginning on or after November 15, 2008. The Company adopted this standard during the first quarter of 2009; the adoption had no impact on
its consolidated financial statements.
In April 2008, the FASB issued a new standard on goodwill and intangibles which amends the factors that should be considered in
developing renewal or extension assumptions used to determine the useful life of a recognized intangible. The intent of this new standard is to
improve the consistency between the useful life of a recognized intangible asset and the period of expected cash flows used to measure the fair
value of the asset. The Company adopted this new standard during the first quarter of fiscal 2009; the adoption did not have any impact on its
consolidated financial statements.
In April 2009, the FASB issued a new standard on the disclosure of financial instruments. This new standard brings the interpretive
guidance into alignment with the changes in U.S. GAAP. The Company adopted this new standard during the second quarter of fiscal 2009; the
adoption did not have any impact on its consolidated financial statements.
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