Harman Kardon 2007 Annual Report Download - page 62

Download and view the complete annual report

Please find page 62 of the 2007 Harman Kardon annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 95

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95

49
Accounting for Stock-Based Compensation, for all grants made on or after July 1, 2002. As such, an
expense based on service attribution recognized in accordance with Financial Accounting Standards
Interpretation (“FIN”) No. 28, Accounting for Stock Appreciation Rights and Other Variable Stock Option
or Award Plans, and the fair value of stock options granted since 2003 have been reflected in net income.
Stock-based compensation is discussed further in Note 11, Stock Option and Incentive Plan.
Recent Accounting Pronouncements.
In February 2007, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial
Accounting Standards (“SFAS”) No. 159, The Fair Value Option for Financial Assets and Financial
Liabilities. The statement permits entities to choose to measure many financial instruments and certain
warranty and insurance contracts at fair value on a contract-by-contract basis. This statement is effective
for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods
within those fiscal years. We are currently assessing the impact of SFAS No. 159 on our consolidated
financial statements upon adoption during fiscal 2009.
In September 2006, FASB issued SFAS No. 157, Fair Value Measurements. The statement defines fair
value, establishes a framework for measuring fair value in generally accepted accounting principles in the
United States of America (“GAAP”), and enhances disclosures about fair value measurements. This
statement applies when other accounting pronouncements require fair value measurements. It does not
require new fair value measurements. This statement is effective for financial statements issued for fiscal
years beginning after November 15, 2007 and interim periods within those fiscal years. We do not expect
SFAS No. 157 to have a material impact on our consolidated financial statements upon adoption during
fiscal 2009.
In September 2006, the SEC released SEC Staff Accounting Bulletin (“SAB”) No. 108, Considering the
Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial
Statements, which addresses how uncorrected errors in previous years should be considered when
quantifying errors in current-year financial statements. SAB No. 108 requires registrants to consider the
effect of all carry over and reversing effects of prior-year misstatements when quantifying errors in
current-year financial statements. SAB No. 108 allows registrants to record the effects of adopting the
guidance as a cumulative-effect adjustment to retained earnings. We adopted SAB No. 108 for the fiscal
year ended June 30, 2007. The adoption of SAB No. 108 had no effect on our consolidated financial
statements.
In September 2006, FASB issued SFAS No. 158, Employers’ Accounting for Defined Benefit Pension and
Other Postretirement Plans. This statement requires an employer to recognize on its balance sheet the
overfunded or underfunded status of a defined benefit postretirement plan measured as the difference
between the fair value of plan assets and the benefit obligation. Employers must also recognize as a
component of accumulated other comprehensive income, net of tax, the actuarial gains and losses and the
prior service costs and credits that arise during the period. We adopted SFAS No. 158 at June 30, 2007
and have disclosed the impact on our consolidated financial statements in Note 12, Retirement Benefits.
In June 2006, the FASB issued FAS Interpretation No. 48, “Accounting for Uncertainty in Income Taxes
— An Interpretation of FASB Statement No. 109” (“FIN 48”). FIN 48 clarifies the accounting for
uncertainty in income taxes recognized in financial statements in accordance with FASB Statement