LensCrafters 2008 Annual Report Download - page 69

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these derivatives are accounted for under SFAS No. 133 and its interpretations, and (iii) how much and
where are the effects of these instruments located on the balance sheet, profit and loss and cash flow
statements. This will be done mostly through tabular formats and better cross referencing of information
included in different sections of the financial report. The statement is effective for the fiscal years and
interim periods beginning on or after November 15, 2008. Earlier adoption is encouraged. Additionally,
the Statement “encourages” but does not require, comparative disclosures for earlier periods at initial
adoption. The Company is still assessing the disclosure impact of this standard on its future consolidated
financial position and results of operations.
In December 2007, the FASB issued SFAS No. 160,
Noncontrolling Interests in Consolidated Financial
Statements - an amendment to ARB No. 51
, establishing new accounting and reporting standards for
noncontrolling interests (formerly known as “minority interests”) in a subsidiary and, when applicable, how
to account for the deconsolidation of such subsidiary. The key differences include that non-controlling
interests will be recorded as a component of equity, the consolidated income statements and statements
of comprehensive income will be adjusted to include the non controlling interest and certain disclosures
have been updated. The statement is effective for the fiscal years and interim periods within those years
beginning on or after December 15, 2008. Earlier adoption is prohibited. The Company has minority
interests in certain subsidiaries and as such is currently evaluating the effect of adoption.
In December 2007, the FASB issued SFAS No. 141(R),
Business Combinations Revised
(“SFAS 141(R)”),
which revises the current SFAS 141. The significant changes include a change from the “cost allocation
process” to determine the value of assets and liabilities to a full fair value measurement approach. In
addition, acquisition related expenses will be expensed as incurred and not included in the purchase price
allocation and contingent liabilities will be separated into two categories, contractual and non-contractual,
and accounted for based on which category the contingency falls into. This statement applies
prospectively and is effective for business combinations for which the acquisition date is on or after the
beginning of the first annual reporting period beginning after December 15, 2008. Since it will be applied
prospectively it will not have an effect on the current financial statements, however, since the Company
participates in business combinations, in the future the Company believes this statement after the
adoption date could have a significant effect on future operations.
In September 2006, the FASB issued SFAS No. 158,
Employer’s Accounting for Defined Benefit Pension
Other Post Retirement Plans (“SFAS 158”),
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 its retirement plans and
recognize changes in the funded status annually through other comprehensive income (“O.C.I.”).
Additionally, SFAS 158 changes the date as of 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 has changed its measurement date on the consolidated financial statements as required
(see Note 10).
2. RELATED PARTY TRANSACTIONS
Stock incentive plan. On September 14, 2004, the Company announced that its majority shareholder, Mr.
Leonardo Del Vecchio, had allocated shares held through La Leonardo Finanziaria S.r.l. (subsequently
merged into Delfin S.àr.l.), a holding company of the Del Vecchio family, representing at that time 2.11
percent (or 9.6 million shares) of the Company’s authorized and issued share capital, to a stock option plan
for top management of the Company. The stock options to be issued under the stock option plan vested
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS |67 <