LensCrafters 2006 Annual Report Download - page 118

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>118 | ANNUAL REPORT 2006
In September 2006, FASB issued SFAS no. 158, Employer’s Accounting for Defined Benefit
Pension Other Post Retirement Plans,which requires the Company to recognize an asset or liability
for the funded status (difference between fair value of plan assets and benefit obligation, which for
defined benefit pension plans is deemed to be the Projected Benefit Obligation) of it’s retirement
plans and recognize changes in the funded status annually through Other Comprehensive
Income(Loss). Additionally the statement changes the date in which the funded status can be
measured (eliminates the 90 day window) with limited exceptions. The effective date of the
recognition of the funded status is for years ending after December 15, 2006, and as such, refer to
Note 10 for the effect on adoption. The effective date for the change in acceptable measurement
date is for fiscal years ending after December 15, 2008. The Company is currently evaluating the
impact of changing its measurement date on the consolidated financial statements.
In July 2006 the FASB issued Financial Accounting Interpretation (“FIN”) no. 48, Accounting for
Uncertainty in Income Taxes - an interpretation of FASB Statement no. 109. FIN 48 requires among
other things a duel step approach (Recognition and Measurement) in recognizing uncertain tax
positions taken or expect to be taken on tax returns. In addition, it provides additional disclosure
requirements, the classification of interest and penalties and classification between current and
long term portions. The recognition requires the tax position must meet a threshold of “more-likely-
than-not” based solely on its technical merits that it will be sustained upon examination of the
taxing authority. After this test is met the Company can recognize a tax benefit equal to the largest
amount of benefit greater than 50% likely to be realized upon final settlement with the tax authority.
FIN 48 must be applied to all existing tax positions for all open tax periods as of the date of
adoption. The cumulative effect of adoption will be recorded as an adjustment to opening retained
earnings in the year of adoption. The effective date of FIN 48 is for fiscal periods beginning after
December 15, 2006. The Company is currently evaluating the impact of adoption on the
consolidated financial statements.
Information expressed in US Dollars -The Company’s consolidated financial statements are
stated in Euro, the currency of the country in which the parent company is incorporated and
operates. The translation of Euro amounts into US Dollar amounts is included solely for the
convenience of international readers and has been made at the rate of Euro 1 to US$ 1.3197. Such
rate was determined by using the noon buying rate of the Euro to US Dollar as certified for
customs purposes by the Federal Reserve Bank of New York as of December 31, 2006. Such
translations should not be construed as representations that Euro amounts could be converted
into US Dollars at that or any other rate.
Reclassifications -The presentation of certain prior year information has been reclassified to
conform to the current year presentation. On September 29, 2006, the Company sold its Things
Remembered, Inc. (“TR”) specialty gifts retail business to a private equity consortium. The TR
business operated solely in the United States and was included in the retail segment of the
Company’s operations as of December 31, 2005 and 2004. As such, for all periods for which a
balance sheet is presented, the Company has reclassified the assets and liabilities included in the
sale as a single asset and liability line items on the balance sheet. In the Statements of
Consolidated Income, for all periods presented, the Company has reclassified sales, cost of sales
and other expenses associated with the discontinued operations as a single line item after income
from continuing operations but before net income. Amounts included in the statement of cash
flows associated with the discontinued operations are separately disclosed as cash flows from
discontinued operations.