Travelers 2002 Annual Report Download - page 58

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for all VIEs. We do not expect the adoption of FIN 46 to have a mate-
rial impact on our consolidated financial statements.
In December 2002, the FASB issued SFAS No. 148, “Accounting
for Stock-Based Compensation – Transition and Disclosure,” which
provides alternative methods of transition for a voluntary change to
the fair value based method of accounting for stock-based employee
compensation. This statement requires additional disclosures in the
event of a voluntary change. It also no longer permits the use of the
original prospective method of transition for changes to the fair value
based method for fiscal years beginning after December 15, 2003.We
currently account for stock-based compensation under APB Opinion
No. 25, “Accounting for Stock Issued to Employees”, using the intrin-
sic value method, and have not made a determination regarding any
change to the fair value method.
In November 2002, the FASB issued FASB Interpretation No. 45,
“Guarantor’s Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of
Others” (“FIN 45”), which expands the disclosures to be made by a
guarantor in their consolidated financial statements and generally
requires recognition of a liability for the fair value of a guarantee at its
inception.The disclosure requirements of this interpretation are effec-
tive for the company for fiscal periods ending after December 15,
2002, and, accordingly, have been included in Note 17.The measure-
ment provisions of this interpretation are applicable on a prospective
basis to guarantees issued or modified after December 31, 2002.This
interpretation does not apply to guarantees issued by insurance com-
panies accounted for under insurance-specific accounting literature.
We do not expect the adoption of the measurement provisions of FIN
45 to have a material impact on our consolidated financial statements.
In July 2002, the FASB issued SFAS No. 146, “Accounting for
Costs Associated with Exit or Disposal Activities,” which requires com-
panies to recognize costs associated with exit or disposal activities
when they are incurred rather than the current practice of recognizing
those costs at the date of a commitment to exit or a disposal plan.The
provisions of SFAS No. 146 are to be applied prospectively to exit or
disposal activities initiated after December 31, 2002. The adoption of
SFAS No. 146 will result in changes to the timing only of recognition
of such costs.
In April 2002, the FASB issued SFAS No. 145, “Rescission of
FASB Statements No. 4, 44, and 64, Amendment of FASB Statement
No. 13, and Technical Corrections.” The primary impact of SFAS
No. 145 was to rescind the requirement to report the gain or loss from
the extinguishment of debt as an extraordinary item on the statement
of income.The provisions of this Statement are generally effective for
fiscal years beginning after May 15, 2002.We do not expect the adop-
tion of SFAS No. 145 to have a material impact on our consolidated
financial statements.
56