Hasbro 2009 Annual Report Download - page 52

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The effect of inflation on the Company’s operations during 2009 was not significant and the Company
will continue its policy of monitoring costs and adjusting prices, accordingly.
New Accounting Pronouncements
In June 2009 the FASB revised accounting standards related to the transfer of financial assets. These
revisions seek to improve the relevance, representational faithfulness, and comparability of the information that
a reporting entity provides in its financial statements about a transfer of financial assets; the effects of a
transfer on its financial position, financial performance, and cash flows; and a transferor’s continuing
involvement, if any, in transferred financial assets. These revisions also eliminate the concept of a qualifying
special-purpose entity, and require such entities to be evaluated for consolidation in accordance with the
applicable consolidation guidance. The requirements of these revised accounting standards are effective for
fiscal years and interim periods beginning after November 15, 2009. As a result of the adoption of these new
accounting standards in 2010, the Company will account for all sales of accounts receivable under its
securitization facility in 2010 as collateralized borrowings. The accounts receivable balances will remain on
the Company’s balance sheet and proceeds from the sales of the receivables will be recorded as short-term
debt.
In June 2009 the FASB amended accounting standards related to the consolidation of variable interest
entities. These amendments require an enterprise to perform an analysis to determine whether the enterprise’s
variable interest or interests give it a controlling financial interest in a variable interest entity. The analysis
identifies the primary beneficiary of a variable interest entity as the enterprise that has both (i) the power to
direct the activities of a variable interest entity that most significantly impact the entity’s economic
performance and (ii) the obligation to absorb losses of the entity that could potentially be significant to the
variable interest entity or the right to receive benefits from the entity that could potentially be significant to
the variable interest entity. The amended standards also require ongoing reassessments of whether an enterprise
is the primary beneficiary of a variable interest entity. At December 27, 2009, the Company has an ownership
interest in one variable interest entity, the joint venture with Discovery. See the relevant discussion in note 5 to
the accompanying consolidated financial statements. Other than as discussed in note 5, the Company does not
expect the adoption of the amended standards to have a material impact on its consolidated balance sheet or
results of operations.
Other Information
The Company is not aware of any material amounts of potential exposure relating to environmental
matters and does not believe its environmental compliance costs or liabilities to be material to its operating
results or financial position.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
The information required by this item is included in Item 7 of Part II of this Report and is incorporated
herein by reference.
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