IHOP 2009 Annual Report Download - page 111

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DineEquity, Inc. and Subsidiaries
Notes to the Consolidated Financial Statements (Continued)
2. Basis of Presentation and Summary of Significant Accounting Policies (Continued)
New Accounting Pronouncements
In June 2009, the FASB amended U.S. GAAP with respect to the accounting for transfers of
financial assets. These amendments, among other things, clarified that the objective of U.S. GAAP is to
determine whether a transferor and all of the entities included in the transferor’s financial statements
being presented have surrendered control over transferred financial assets; limited the circumstances in
which a financial asset, or portion of a financial asset, should be derecognized when the transferor has
not transferred the entire original financial asset to an entity that is not consolidated with the
transferor in the financial statements being presented and/or when the transferor has continuing
involvement with the transferred financial asset; and removed the concept of a qualifying special-
purpose entity. The Company will be required to adopt these amendments effective January 1, 2010,
and is currently evaluating the potential impact, if any, on its consolidated financial statements.
In June 2009, the FASB amended U.S. GAAP with respect to the consolidation of variable interest
entities (‘‘VIEs’’). These amendments, among other things, (i) change existing guidance for determining
whether an entity is a VIE; (ii) require ongoing reassessments of whether an entity is the primary
beneficiary of a VIE; and (iii) require enhanced disclosures about an entity’s involvement in a VIE.
The Company will be required to adopt these amendments effective January 1, 2010. Adoption of these
amendments will not result in the identification of additional VIEs. For the VIE the Company has
currently identified (see Note 14 of Notes to Consolidated Financial Statements), adoption will not
change the determination that the Company is not the primary beneficiary.
3. Receivables
2009 2008
(In thousands)
Accounts receivable .............................. $ 53,245 $ 55,241
Gift card receivables .............................. 22,660 32,345
Credit card receivables ............................ 7,494 7,587
Notes receivable ................................. 17,678 22,664
Equipment leases receivable ........................ 146,537 153,560
Direct financing leases receivable .................... 111,307 115,517
Other ........................................ 8,966 11,063
367,887 397,977
Less: allowance for doubtful accounts ................. (3,422) (2,941)
364,465 395,036
Less: current portion ............................. (104,690) (117,930)
Long-term receivables ............................. $259,775 $ 277,106
Accounts receivable primarily includes receivables due from franchisees and distributors. Gift card
receivables consist primarily of amounts due from third-party vendors. Credit card receivables consist
primarily of amounts due from credit card companies used by the Company to process customer
transactions. Notes receivable include IHOP franchise fee notes in the amount of $10.4 million and
$16.1 million at December 31, 2009 and 2008, respectively. IHOP franchise fee notes have a term of
five to eight years and are due in equal weekly installments, primarily bear interest averaging 8.32%
92