Twenty-First Century Fox 2006 Annual Report Download - page 65

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Results of Operations (CONTINUED)
Recent Accounting Pronouncements
In May 2005, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 154, “Accounting Changes and Error
Corrections—a replacement of APB Opinion No. 20 and FASB Statement No. 3” (“SFAS No. 154”). This standard establishes,
unless impracticable, retrospective application as the required method for reporting a change in accounting principle in the
absence of explicit transition requirements specific to the newly adopted accounting principle. SFAS No. 154 will become
effective for the Company for accounting changes and corrections of errors beginning in fiscal 2007. SFAS No. 154 may
have a significant effect on the Company’s consolidated financial statements to the extent that the Company changes its
accounting principles in the future.
In November 2005, the FASB issued FASB Staff Position (“FSP”) FAS 115-1 and FAS 124-1, “The Meaning of Other-Than-
Temporary Impairment and Its Application to Certain Investments,” (“FSP 115-1 and 124-1”) which addresses the determi-
nation as to when an investment is considered impaired, whether that impairment is other-than-temporary and the
measurement of an impairmentloss. FSP 115-1 and 124-1 also includes accounting considerations subsequent totherecog-
nition of an other-than-temporary impairment and requires certain disclosures about unrealized losses that have not been
recognized as other-than-temporary impairments. The guidance in FSP 115-1 and 124-1 amends FASB Statement No. 115,
“Accounting for Certain Investments in Debt and Equity Securities,” and Accounting Principles Board (“APB”) Opinion
No. 18, “The Equity Method of Accounting for Investments in Common Stock.” FSP 115-1 and 124-1 was effective for
reporting periods beginning after December 15, 2005. The adoption of FSP 115-1 and 124-1 did not have amaterial impact
on the Companies consolidated financial statements.
In February 2006, the FASB issued SFAS No. 155, “Accounting for Certain Hybrid Instruments” (“SFAS No. 155”). SFAS
No. 155 amends SFAS No. 133 and SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities.” SFAS No. 155, among other things: permits the fair value remeasurement of any hybrid
financial instrument that contains an embedded derivative that otherwise would require bifurcation; clarifies which
interest-only strips and principal-only strips are not subject totherequirements of SFAS No. 133; and establishes arequire-
ment toevaluate interests in securitized financial assets to identify interests that are freestanding derivatives or that are
hybrid financial instruments that contain an embedded derivative requiring bifurcation. SFAS No. 155 is effective for all
financial instruments acquired or issued in fiscal years beginning after September 15, 2006. SFAS No. 155 is not expected to
have amaterial impact on the Company’s consolidated financial statements.
In June2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an Inter-
pretation of FASB Statement No. 109” (“FIN 48”). FIN 48 clarifies the accounting for uncertainty in income taxesrecognized
in accordance with SFAS No. 109,“Accounting for Income Taxes” and prescribes arecognition threshold and measurement
attribute for the financial statement recognition and measurement of atax position taken or expected to be takeninatax
return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods,
disclosure and transition. FIN 48 will become effective for the Company beginning in fiscal 2008. The Company is cur-
rently evaluating what effect the adoption of FIN 48 will have on the Company’s future results of operations and financial
condition.
ANNUAL REPORT 65