Panera Bread 2008 Annual Report Download - page 67

SFAS No. 141R will have an impact on its consolidated financial statements when effective, but the nature and
magnitude of the specific effects will depend upon the nature, terms and size of the acquisitions consummated after
the effective date.
In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial
Statements, an amendment of ARB 51. SFAS No. 160 changes the accounting and reporting for minority interests.
Minority interests will be recorded initially at fair market value and will be recharacterized as noncontrolling
interests and will be reported as a component of equity separate from the parent’s equity, and purchases or sales of
equity interests that do not result in a change in control will be accounted for as equity transactions. In addition, net
income attributable to the noncontrolling interest will be included in consolidated net income on the face of the
income statement and upon a loss of control, the interest sold, as well as any interest retained, will be recorded at fair
value with any gain or loss recognized in earnings. SFAS No. 160 is effective for financial statements issued for
fiscal years beginning after December 15, 2008, and interim periods within those fiscal years, except for the
presentation and disclosure requirements, which will apply retrospectively. Currently, only the Company’s
51 percent interest in Paradise would be impacted by SFAS No. 160.
In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging
Activities — An Amendment of FASB Statement No. 133. SFAS No. 161 applies to all derivative instruments and
related hedged items accounted for under SFAS No. 133, Accounting for Derivative Instruments and Hedging
Activities, and requires entities to provide greater transparency about (a) how and why an entity uses derivative
instruments, (b) how derivative instruments and related hedged items are accounted for under SFAS No. 133 and its
related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial
position, results of operations, and cash flows. SFAS No. 161 is effective for fiscal years and interim periods
beginning after November 15, 2008. Additionally, because SFAS No. 161 applies only to financial statement
disclosures, it will not have a material impact on the Company’s consolidated financial statements.
In April 2008, the FASB issued FSP SFAS No. 142-3, Determination of the Useful Life of Intangible Assets.
FSP SFAS No. 142-3 amends the factors that should be considered in developing renewal or extension assumptions
used to determine the useful life of a recognized intangible asset under SFAS No. 142, Goodwill and Other
Intangible Assets. Previously, under the provisions of SFAS No. 142, an entity was precluded from using its own
assumptions about renewal or extension of an arrangement where there was likely to be substantial cost or material
modifications. FSP SFAS No. 142-3 removes the requirement of SFAS No. 142 for an entity to consider whether an
intangible asset can be renewed without substantial cost or material modification to the existing terms and
conditions and requires an entity to consider its own experience in renewing similar arrangements. FSP
SFAS No. 142-3 also increases the disclosure requirements for a recognized intangible asset to enable a user
of financial statements to assess the extent to which the expected future cash flows associated with the asset are
affected by the entity’s intent or ability to renew or extend the arrangement. FSP SFAS 142-3 is effective for fiscal
years beginning after December 15, 2008 and interim periods within those fiscal years. Early adoption is prohibited.
The guidance for determining the useful life of a recognized intangible asset is applied prospectively to intangible
assets acquired after the effective date. Accordingly, the Company does not anticipate that the initial application of
FSP SFAS No. 142-3 will have an impact on the Company. The Company expects FSP SFAS No. 142-3 will have an
impact on its consolidated financial statements when effective, but the nature and magnitude of the specific effects
will depend upon the nature, terms and size of the acquisitions consummated after the effective date.
In June 2008, the FASB issued FSP Emerging Issues Task Force (“EITF”) No. 03-6-1, Determining Whether
Instruments Granted in Share-Based Payment Transactions Are Participating Securities. According to FSP EITF
No. 03-6-1, unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend
equivalents are considered participating securities under SFAS No. 128, Earnings per Share. As such, they should
be included in the computation of basic earnings per share (“EPS”) using the two-class method. FSP EITF
No. 03-6-1 is effective for financial statements issued for fiscal years beginning after December 15, 2008, as well as
interim periods within those years. Once effective, all prior-period EPS data presented must be adjusted
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PANERA BREAD COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)