Hertz 2007 Annual Report Download - page 124

GAAP and expands disclosures about fair value measurements. The provisions of SFAS No. 157 are
effective for us for financial instruments beginning in January 2008 and non-financial instruments
beginning in January 2009. We are currently reviewing SFAS No. 157 to determine its impact, if any, on
our financial position or results of operations. In 2008, we anticipate an impact on only our financial
statement disclosures.
In February 2007, the FASB issued SFAS No. 159, ‘‘The Fair Value Option for Financial Assets and
Financial Liabilities,’’ or ‘‘SFAS No. 159.’’ SFAS No. 159 permits entities to choose to measure many
financial instruments and certain other items at fair value. The provisions of SFAS No. 159 are effective
for us beginning in January 2008. We do not believe the adoption of SFAS No. 159 will have any impact
on our financial position or results of operations.
In December 2007, the FASB issued SFAS No. 141(revised 2007), ‘‘Business Combinations,’’ or ‘‘SFAS
No. 141(R).’’ The new standard requires the acquiring entity that gains control in a business combination
to recognize 100% of the fair value of the assets acquired and liabilities assumed in the transaction;
establishes the acquisition-date fair value as the measurement objective for all assets acquired and
liabilities assumed; requires that acquisition related costs be expensed; and requires the acquirer to
disclose to investors and other users all of the information they need to evaluate and understand the
nature and financial effect of the business combination. The provisions of SFAS No. 141(R) are effective
for us beginning in January 2009.
In December 2007, the FASB issued SFAS No. 160, ‘‘Noncontrolling Interests in Consolidated Financial
Statements-an amendment of ARB No. 51,’’ or ‘‘SFAS No. 160.’’ SFAS No. 160 will change the
accounting and reporting for minority interests, which will be recharacterized as noncontrolling interests
and classified as a component of stockholders’ equity. Additionally, the amount of consolidated net
income attributable to the parent and to the noncontrolling interests must be clearly identified and
presented on the face of the consolidated statement of operations. Finally, changes in a parent’s
ownership interest while the parent retains its controlling financial interest in its subsidiary will be
accounted for consistently as equity transactions. The provisions of SFAS No. 160 are effective for us
beginning in January 2009.
In December 2007, the SEC issued Staff Accounting Bulletin 110, or ‘‘SAB No. 110,’’ which expresses
the views of the staff regarding the use of a ‘‘simplified’’ method, as discussed in SAB No. 107, in
developing an estimate of the expected term of ‘‘plain vanilla’’ stock options in accordance with SFAS
No. 123 (R). SAB No. 110 allows for the continued use, under certain circumstances, of the ‘‘simplified’’
method in developing an estimate of the expected term of so-called ‘‘plain vanilla’’ stock options, and we
will continue to use such method until such time as there is sufficient historical evidence on which we can
base an estimate of the expected term of our stock options.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
See ‘‘Item 7—Management’s Discussion and Analysis of Financial Condition and Results of
Operations—Market Risks’’ included elsewhere in this Annual Report.
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