Pep Boys 2009 Annual Report Download - page 108

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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)
December 15, 2009. The adoption did not have a material impact on the Company’s consolidated
financial position or results of operations as it only amends the required disclosures.
In October 2009, the FASB issued Accounting Standards Update 2009-13 ‘‘Revenue Recognition
(Topic 605)—Multiple-Deliverable Revenue Arrangements a consensus of the FASB Emerging Issues
Task Force,’’ (ASU 2009-13). This update eliminates the residual method of allocation and requires that
consideration be allocated to all deliverables using the relative selling price method. ASU 2009-13 is
effective for material revenue arrangements entered into or materially modified in fiscal years
beginning on or after June 15, 2010. The Company does not believe the adoption of ASU 2009-13 will
have a material impact on its consolidated financial statements.
In January 2010, the FASB issued Accounting Standards Update 2010-06 ‘‘Fair Value
Measurements—Improving Disclosures on Fair Value Measurements’’ (ASU 2010-06). This guidance
requires new disclosures surrounding transfers in and out of level 1 or 2 in the fair value hierarchy and
also requires that in the reconciliation of level 3 inputs, the entity should report separately information
on purchases, sales, issuances or settlements. The increased disclosures should be reported for each
class of assets or liabilities. ASU 2010-06 also clarifies existing disclosures for the level of
disaggregation, disclosures about valuation techniques and inputs used to determine level 2 or 3 fair
value measurements and includes conforming amendments to the guidance on employers’ disclosures
about postretirement benefit plan assets ASC 715. ASU 2010-06 is effective for interim and annual
reporting periods beginning after December 15, 2009 except for the disclosures about purchases, sales,
issuances or settlements in the roll forward activity for level 3 fair value measurements which are
effective for interim and annual periods beginning after December 15, 2010. The adoption of ASU
2010-06 for requirements that are effective December 15, 2009 did not have a material affect on the
Company’s consolidated financial statements. The Company is evaluating the impact on its consolidated
financial statements for those requirements of ASU 2010-06 which are effective December 15, 2010.
NOTE 2—BUSINESS COMBINATIONS
On October 31, 2009, the Company acquired substantially all of the assets (other than real
property) and certain liabilities of Florida Tire, Inc. (‘‘Florida Tire’’), a privately held automotive
service and tire business located in the Orlando Florida area consisting of 10 service locations. The
Company agreed to pay up to $4,418 for Florida Tire including contingent consideration of $1,660. The
Company has completed the purchase accounting for the Florida Tire acquisition and has recorded net
assets of $4,354, including goodwill of $2,549.
50