Saks Fifth Avenue 2008 Annual Report Download - page 70

SAKS INCORPORATED & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands, except per share amounts)
NEW ACCOUNTING PRONOUNCEMENTS
On February 3, 2008, the Company adopted the provisions of SFAS No. 157, “Fair Value Measurements”
(“SFAS No. 157”), which clarifies the principle that fair value should be based on the assumptions market
participants would use when pricing an asset or a liability and establishes a fair value hierarchy that prioritizes
the information used to develop those assumptions. In February 2008, the FASB amended SFAS No. 157 to
exclude FASB Statement No. 13 “Accounting for Leases” and its related interpretive accounting pronouncements
that address leasing transactions. The FASB also issued a final Staff Position to allow a one-year deferral of
adoption of SFAS No. 157 for nonfinancial assets and nonfinancial liabilities that are recognized or disclosed at
fair value in the financial statements on a non-recurring basis. The Company is in the process of evaluating the
impact of applying SFAS No. 157 to nonfinancial assets and liabilities measured on a non-recurring basis. The
impact of applying SFAS No. 157 to financial assets and liabilities did not have a material impact on the
consolidated financial statements for the year ending January 31, 2009.
In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and
Financial Liabilities” (“SFAS No. 159”). SFAS No. 159 permits entities to choose to measure many financial
instruments and certain other items at fair value that currently are not required to be measured at fair value. This
Statement is effective no later than fiscal years beginning on or after November 15, 2007. The Company elected
to continue to record long-term debt at its amortized cost. Accordingly, this standard has no impact on the
consolidated financial statements.
In December 2007, the FASB issued SFAS No. 141R, “Business Combinations” (“SFAS No. 141R”), which
addresses the recognition and accounting for identifiable assets acquired, liabilities assumed, and non-controlling
interests in business combinations. SFAS No. 141R also establishes expanded disclosure requirements for
business combinations. SFAS No. 141R will become effective as of the beginning of the 2009 fiscal year.
Generally, the effect of SFAS No. 141R will depend on the circumstances of any potential future acquisitions.
In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial
Statements” (“SFAS No. 160”). This standard outlines the accounting and reporting for ownership interest in a
subsidiary held by parties other than the parent. SFAS No. 160 is effective as of the beginning of the 2009 fiscal
year. The adoption of this standard will not have a material impact on the consolidated financial statements.
In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging
Activities” (“SFAS No. 161”). This Statement amends and expands the disclosure requirements of SFAS
No. 133, “Accounting for Derivative Instruments and Hedging Activities” (“SFAS No. 133”), to require an entity
to provide an enhanced understanding of its use of derivative instruments, how they are accounted for under
SFAS No. 133 and their effect on the entity’s financial position, financial performance, and cash flows. The
provisions of SFAS No. 161 are effective as of the beginning of the 2009 fiscal year. The adoption of this
standard will not have a material impact on the consolidated financial statements.
In May 2008, the FASB issued FSP Accounting Principles Board (“APB”) No.14-1 “Accounting for
Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash
Settlement).” (“FSP APB 14-1”). FSP APB 14-1 clarifies that convertible debt instruments that may be settled in
cash upon conversion (including partial cash settlement) are not addressed by paragraph 12 of APB Opinion
No. 14, “Accounting for Convertible Debt and Debt Issued with Stock Purchase Warrants.” Additionally, FSP
APB 14-1 specifies that issuers of such instruments should separately account for the liability and equity
F-16