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Table of Contents
MONEYGRAM INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
accounting principle if it is required by a newly issued accounting pronouncement or the entity can justify the use of an allowable alternative accounting
principle on the basis that it is preferable. This statement also requires that corrections for errors discovered in prior period financial statements be reported as
a prior period adjustment by restating the prior period financial statements. Additional disclosures are required when a change in accounting principle or
reporting entity occurs, as well as when a correction for an error is reported. The statement is effective for the Company for fiscal 2006. No material impact is
anticipated as a result of the adoption of this statement.
In November 2005, the FASB issued FASB Staff Position ("FSP") Nos. 115-1 and 124-1, The Meaning of Other-Than-Temporary Impairment and Its
Application to Certain Investments. The FSPs address the determination as to when an investment is considered impaired, whether that impairment is other-
than-temporary and the measurement of an impairment loss, as well as sets forth disclosure requirements for investments in an unrealized loss position. The
Company has adopted the FSPs effective December 31, 2005 and included all required disclosures in Note 4. There was no material impact as a result of the
adoption of these FSPs.
In January 2006, the FASB issued FSP No. 45-3, Application of FASB Interpretation No. 45 ("FIN 45") to Minimum Revenue Guarantees Granted to a
Business or Its Owners. This FSP amends FIN 45 to include guarantees granted to a business that its revenue for a specified period of time will be at least a
specified amount. FIN 45 requires that a company record an obligation at the inception of a guarantee equal to the fair value of the guarantee, as well as
disclose certain information relating to the guarantee. The FSP is applicable for minimum revenue guarantees issued or modified by the Company on or after
January 1, 2006, with no revision or restatement to the accounting treatment of such guarantees issued prior to the adoption date allowed. The disclosure
requirements of FIN 45 will be applicable to all outstanding minimum revenue guarantees. The Company has not completed its assessment of the impact of
this FSP, but does not expect it to be material to its consolidated financial statements.
In February 2006, the FASB issued FSP No. 123R-4, Classification of Options and Similar Instruments Issued as Employee Compensation That Allow for
Cash Settlement upon the Occurrence of a Contingent Event. This FSP amends SFAS No. 123R to require that stock options issued to employees as
compensation be accounted for as equity instruments until a contingent event allowing for cash settlement is probable of occurring. The Company has adopted
FSP No. 123R-4 effective January 1, 2006 with no impact to the Company's consolidated financial statements.
Note 3. Acquisitions and Discontinued Operations
ACH Commerce: On April 29, 2005, the Company acquired substantially all of the assets of ACH Commerce L.L.C., an automated clearing house payment
processor, for a purchase price of $8.5 million. The acquisition provides the Company with the technology and systems platform to expand its line of payment
services. The financial impact of the acquisition is not material to the Consolidated Balance Sheets or the Consolidated Statements of Income.
Viad Corp: MoneyGram is considered the divesting entity and treated as the "accounting successor" to Viad for financial reporting purposes. The continuing
business of Viad is referred to as "New Viad." The spin off of New Viad was accounted for pursuant to APB Opinion No. 29, Accounting for Nonmonetary
Transactions, and was based upon the recorded amounts of the net assets divested. On June 30, 2004, the Company charged the historical cost carrying
amount of the net assets of New Viad of $426.6 million directly to equity as a dividend. As a result, New Viad's results of operations (with certain
adjustments) are included in the Consolidated Statement of Income in "Income and gain from discontinued operations" in accordance with the provisions of
SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. Also included in "Income and gain from discontinued operations" in the
Consolidated Statement of Income for 2004 is a charge for spin-off related costs of
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