OfficeMax 2011 Annual Report Download - page 73

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The measurement of impairment of indefinite life intangibles and other long-lived assets includes estimates
and assumptions which are inherently subject to significant uncertainties. In testing for impairment, we measure
the estimated fair value of our reporting units, intangibles and fixed assets based upon discounted future
operating cash flows using a discount rate reflecting a market-based, weighted average cost of capital. In
estimating future cash flows, we use our internal budgets and operating plans, which include many assumptions
about future growth prospects, margin rates, and cost factors. Differences in assumptions used in projecting
future operating cash flows and in selecting an appropriate discount rate could have a significant impact on the
determination of fair value and impairment amounts.
Recently Issued or Newly Adopted Accounting Standards
In June 2011, the FASB issued guidance which establishes disclosure requirements for other comprehensive
income. The guidance requires the reporting of components of other comprehensive income and components of
net income together as components of total comprehensive income, and is effective for periods beginning on or
after December 15, 2011. The guidance requires retrospective application and earlier application is permitted.
The adoption of this guidance affects the presentation of certain elements of the Company’s financial statements,
but these changes in presentation will not have a material impact on our financial statements.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
Information concerning quantitative and qualitative disclosures about market risk is included under the
caption “Disclosures of Financial Market Risks” in “Item 7. Management’s Discussion and Analysis of Financial
Condition and Results of Operations” in this Form 10-K and is incorporated herein by reference.
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