Hertz 2007 Annual Report Download - page 139

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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.
Note 2—Goodwill and Other Intangible Assets
We account for our goodwill and indefinite-lived intangible assets under SFAS No. 142. Under SFAS
No. 142, goodwill and indefinite-lived intangible assets must be tested for impairment at least annually.
We performed an annual review in the second quarter of 2007, consistent with past years, and no
impairment was determined to exist. Subsequent to performing our annual impairment review, we
changed the date for performing these tests to the fourth quarter based on financial information available
through October 1, 2007. We believe this change in accounting principle is preferable because the new
date more closely aligns with our annual budgeting process and allows for a better estimation of the
future cash flows used in the discounted cash flow model we use to test for impairment. The change in
accounting principle has no effect on our consolidated financial statements presented herein. We
conducted the impairment review during the fourth quarter of 2007 and no impairment was determined
to exist.
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