Urban Outfitters 2009 Annual Report Download - page 63

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URBAN OUTFITTERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Recently Issued Accounting Pronouncements
In November 2007, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 141R
“Business Combinations” (“SFAS No 141R”), which requires that all business combinations be
accounted for by applying the acquisition method. Under the acquisition method, the acquirer
recognizes and measures the identifiable assets acquired, the liabilities assumed, and any contingent
consideration and contractual contingencies, as a whole at their fair value as of the acquisition date.
Under SFAS No. 141R, all transaction costs are expensed as incurred. SFAS No. 141R rescinds EITF
93-7. Under EITF 93-7, the effect of any subsequent adjustments to uncertain tax positions were
generally applied to goodwill, except for post-acquisition interest on uncertain tax positions, which
was recognized as an adjustment to income tax expense. Under SFAS No. 141R, all subsequent
adjustments to these uncertain tax positions that otherwise would have impacted goodwill will be
recognized in the income statement. The guidance in SFAS No. 141R will be applied prospectively to
business combinations for which the acquisition date is on or after the beginning of the first annual
reporting period beginning after December 15, 2008. The Company does not expect the application of
SFAS No. 141R to have a material impact on our consolidated financial statements.
In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets
and Financial Liabilities: Including an Amendment of FASB Statement No. 115” (“SFAS No. 159”).
SFAS No. 159 provides companies with an option to report selected financial assets and liabilities at
fair value and requires entities to display the fair value of those assets and liabilities for which the
Company has chosen to use fair value on the face of the balance sheet. SFAS No. 159 is effective for
financial statements issued for fiscal years beginning after November 15, 2007. Effective February 1,
2008, the Company adopted SFAS No. 159 and has elected not to apply the provisions of SFAS
No. 159 to report certain of its assets and liabilities at fair value.
In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements.” SFAS No. 157
defines fair value, establishes a framework for measuring fair value in U.S. Generally Accepted
Accounting Principles, and expands disclosures about fair value measurements. SFAS No. 157 is
effective for financial assets and financial liabilities in fiscal years beginning after November 15, 2007
and for certain nonfinancial assets and certain nonfinancial liabilities in fiscal years beginning after
November 15, 2008. Effective February 1, 2008, we have adopted the provisions of SFAS No. 157 that
relate to our financial assets and financial liabilities (see Note 4). We are currently evaluating the
impact of the provisions of SFAS No. 157 that relate to our nonfinancial assets and nonfinancial
liabilities, which are effective for us as of February 1, 2009.
F-15