Pep Boys 2009 Annual Report Download - page 107

THE PEP BOYS—MANNY, MOE & JACK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Years ended January 30, 2010, January 31, 2009 and February 2, 2008
(dollar amounts in thousands, except share and per share data)
NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
• Recognize, through comprehensive income, certain changes in the funded status of a defined
benefit and post retirement plan in the year in which the changes occur;
• Measure plan assets and benefit obligations as of the end of the employer’s fiscal year; and
• Disclose additional information.
The Company adopted the requirement to recognize the funded status of a benefit plan and the
additional disclosure requirements at February 3, 2007. At February 2, 2008, the Company adopted the
requirement to measure plan assets and benefit obligations as of the date of the Company’s fiscal year
end. The change of measurement date from a calendar year to the Company’s fiscal year resulted in a
net charge to retained earnings of $189,000 and a credit to accumulated other comprehensive loss of
$123,000. This net charge to retained earnings represents the after-tax pension expense for the period
from January 1, 2008 to February 2, 2008. ASC 715 did not have a material impact on the Company’s
consolidated financial position or results of operations after February 2, 2008.
In March 2007, the FASB issued guidance on accounting for split dollar life insurance
arrangements which was included in ASC 718 ‘‘Compensation—Stock Compensation.’’ This ASC
provides guidance on determining whether a liability for the postretirement benefit associated with a
collateral assignment split-dollar life insurance arrangement should be recorded. ASC 718 also provides
guidance on how a company should recognize and measure the asset in a collateral assignment split-
dollar life insurance contract. The original guidance for accounting for split dollar life insurance
arrangements was effective for fiscal years beginning after December 15, 2007. ASC 718 resulted in a
$1,165,000 net of tax charge to retained earnings on February 3, 2008.
In March 2008, the FASB issued guidance for disclosures about derivative instruments and hedging
activities which was included in ASC 815 ‘‘Derivatives and Hedging.’’ This ASC requires increased
qualitative, quantitative, and credit-risk disclosures. Qualitative disclosures include how and why an
entity uses derivatives or hedging activity, how the entity is accounting for these activities and how the
instruments affect the entity’s financial position, financial performance and cash flows. Quantitative
disclosures include information (in a tabular format) about the fair value of the derivative instruments,
including gains and losses, and should contain more detailed information about the location of the
derivative instrument in the entity’s financial statements. Credit-risk disclosures include information
about the existence and nature of credit risk-related contingent features included in derivative
instruments. Credit-risk-related contingent features can be defined as those that require entities, upon
the occurrence of a credit event (e.g., credit rating downgrade), to settle derivative instruments or to
post collateral. The guidance is effective for financial statements issued for fiscal years and interim
periods beginning after November 15, 2008. ASC 815 did not have a material impact on the Company’s
consolidated financial position or results of operations as it only relates to required disclosures.
In December 2008, the FASB issued FASB Staff Position (FSP) 132(R)-1 which gave guidance on
employers’ disclosures about postretirement benefit plan assets, which is included in ASC 715
‘‘Compensation—Retirement Benefits.’’ The guidance requires additional disclosures about plan assets
of a defined benefit pension or other postretirement plan and is effective for fiscal years ending after
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