Garmin 2007 Annual Report Download - page 92

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66
2005
Net income as reported $311,219
Add: Total stock-based employee compensation
expense recorded during the year 925
Deduct: Total stock-based employee compensation expense
determined under fair-value based method for all awards,
net of tax effects (7,239)
Pro forma net income $304,905
Net income per share as reported:
Basic $1.44
Diluted $1.43
Pro forma net income per share:
Basic $1.41
Diluted $1.40
Recently Issued Accounting Pronouncements
In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, Fair Value
Measurements (“SFAS No. 157”). SFAS No. 157 establishes a framework for measuring fair value in GAAP, and
expands disclosures about fair value measurements. SFAS No. 157 applies under other accounting pronouncements
that require or permit fair value measurements. This statement is effective for fiscal years beginning after
November 15, 2007, and interim periods within those fiscal years. The Company will be required to adopt SFAS
No. 157 in the first quarter of fiscal year 2008. We do not expect the adoption of SFAS No. 157 to have a material
impact on our financial reporting and disclosure.
In February 2007, the FASB issued Statement of Financial Accounting Standards (“SFAS No. 159”), “The Fair
Value Option for Financial Assets and Financial Liabilities.” SFAS No. 159 allows entities the option to measure
eligible financial instruments at fair value as of specified dates. Such election, which may be applied on an
instrument by instrument basis, is typically irrevocable once elected. SFAS No. 159 is effective for fiscal years
beginning after November 15, 2007, and early application is allowed under certain circumstances. Management is
currently evaluating the requirements of SFAS No. 159 and has not yet determined the impact, if any, on the
Company’s consolidated financial statements.
In June 2007, the FASB also ratified EITF 07-3, "Accounting for Nonrefundable Advance Payments for Goods
or Services Received for Use in Future Research and Development Activities" ("EITF 07-3"). EITF 07-3 requires
that nonrefundable advance payments for goods or services that will be used or rendered for future research and
development activities be deferred and capitalized and recognized as an expense as the goods are delivered or the
related services are performed. EITF 07-3 is effective, on a prospective basis, for fiscal years beginning after
December 15, 2007 and will be adopted by the Company in the first quarter of fiscal 2008. The Company does not
expect the adoption of EITF 07-3 to have a material effect on the Company's consolidated results of operations and
financial condition.
In December 2007, the FASB issued SFAS No. 141 (revised 2007), "Business Combinations" ("SFAS 141R").
SFAS 141R establishes principles and requirements for how an acquirer recognizes and measures in its financial
statements the identifiable assets acquired, the liabilities assumed, any noncontrolling interest in the acquiree and the
goodwill acquired. SFAS 141R also establishes disclosure requirements to enable the evaluation of the nature and
financial effects of the business combination. SFAS 141R is effective for fiscal years beginning after December 15,
2008, and will be adopted by the Company in the first quarter of fiscal 2009. The Company is currently evaluating
the potential impact, if any, of the adoption of SFAS 141R on its consolidated results of operations and financial
condition.