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66 GOLDMAN SACHS 2003 ANNUAL REPORT
Management’s Discussion and Analysis
In April 2003, the FASB issued SFAS No. 149,
“Amendment of Statement 133 on Derivative Instruments
and Hedging Activities.” SFAS No. 149 amends and clar-
ifies the accounting for derivative instruments, including
certain derivative instruments embedded in other con-
tracts, and for hedging activities. In addition, the state-
ment clarifies when a contract is a derivative and when a
derivative contains a financing component that warrants
special reporting in the statement of cash flows. As
required, we adopted SFAS No. 149 prospectively for con-
tracts entered into or modified, and hedging relationships
designated, after June 30, 2003. Adoption did not have a
material effect on our financial condition, results of oper-
ations or cash flows.
In May 2003, the FASB issued SFAS No. 150,
“Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equity.” SFAS
No. 150 establishes standards for how an issuer classi-
fies and measures certain financial instruments with
characteristics of both liabilities and equity and imposes
certain additional disclosure requirements. The provi-
sions of SFAS No. 150 are generally effective for finan-
cial instruments entered into or modified after May 31,
2003, except for those provisions relating to noncon-
trolling interests that have been deferred. As required,
we adopted the applicable provisions of SFAS No. 150
to all financial instruments at the beginning of our fourth
quarter of fiscal 2003. Adoption did not have a material
effect on our financial condition, results of operations or
cash flows. If the deferred provisions are finalized in
their current form, management does not expect adop-
tion to have a material effect on our financial condition,
results of operations or cash flows.
In December 2003, the FASB issued SFAS No. 132
(revised 2003), “Employers’ Disclosures about Pensions
and Other Postretirement Benefits.” SFAS No. 132
revises employers’ disclosures about pension plans and
other postretirement benefits by requiring additional dis-
closures such as descriptions of the types of plan assets,
investment strategies, measurement dates, plan obliga-
tions, cash flows and components of net periodic benefit
costs recognized during interim periods. The statement
does not change the measurement or recognition of the
plans. Interim period disclosure is generally effective for
our second quarter of 2004. Required annual disclosure
is effective for our fiscal year ending 2004.