Whole Foods 2009 Annual Report Download - page 57

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stated value associated with the retirement of treasury shares is required to be charged to retained earnings in accordance
with ASC 505-30, “Equity-Treasury Stock,” and has elected to charge the entire excess to retained earnings. The Company’s
common stock has no par value. The Company has made a corresponding adjustment to its consolidated statements of
shareholders’ equity and comprehensive income to reflect the reclassification. There was no impact on previously reported
statements of operations, earning per share amounts, statements of cash flows or total shareholders’ equity as a result of this
reclassification. Additionally, this reclassification does not impact compliance with any applicable debt covenants in the
Company’s credit agreements.
Recent Accounting Pronouncements
In December 2007, the FASB issued new guidance within ASC 805, “Business Combinations,” which replaces previous
guidance in this Topic and applies to all transactions or other events in which an entity obtains control of one or more
businesses, including those sometimes referred to as “true mergers” or “mergers of equals” and combinations achieved
without the transfer of consideration. The new provisions establish principles and requirements for how the acquirer
recognizes and measures identifiable assets acquired, liabilities assumed, any noncontrolling interest and goodwill acquired,
and also provide for disclosures to enable users of the financial statements to evaluate the nature and financial effects of the
business combination. Additional amendments address the recognition and initial measurement, subsequent measurement,
and disclosure of assets and liabilities arising from contingencies acquired as part of a business combination. The newly
issued guidance is effective for fiscal years beginning after December 15, 2008 and is applied prospectively to business
combinations completed on or after that date. The provisions are effective for the Company’s fiscal year ending September
26, 2010. We will evaluate the impact, if any, that the adoption of these provisions could have on our consolidated financial
statements.
In December 2007, the FASB issued amendments to ASC 810, “Consolidation.” These provisions establish accounting and
reporting standards for noncontrolling interests (“minority interests”) in subsidiaries, and clarify that a noncontrolling interest
in a subsidiary should be accounted for as a component of equity separate from the parent’s equity. Additionally, these
amendments serve to improve the consistency of guidance in ASC Topics 810 and 805. The amended guidance is effective
for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2008 and is applied
prospectively, except for presentation and disclosure requirements, which will apply retrospectively. These provisions are
effective for the Company’s first quarter of fiscal year ending September 26, 2010. We are currently evaluating the impact, if
any, that the adoption of these provisions will have on our consolidated financial statements.
In April 2008, the FASB issued amendments to ASC 350, “Intangibles – Goodwill and Other.” These provisions amend the
factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a
recognized intangible asset. The intent of the position is to improve the consistency between the determination of the useful
life of a recognized intangible asset and the period of expected cash flows used to measure the fair value of the asset. The
amended guidance is effective for fiscal years beginning after December 15, 2008. These provisions are effective for the
Company’s fiscal year ending September 26, 2010. We will evaluate the impact, if any, that the adoption of these provisions
could have on our consolidated financial statements.
In May 2008, the FASB issued amendments to ASC 470, “Debt,” which clarify that convertible debt instruments that may be
settled in cash upon conversion (including partial cash settlement) were not addressed by previously existing guidance and
specifies that such users should separately account for the liability and equity components in a manner that will reflect the
entity’s nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. The amended guidance is
effective for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. These provisions
are effective for the Company’s first quarter of fiscal year ending September 26, 2010. We are currently evaluating the
impact, if any, that the adoption of these provisions will have on our consolidated financial statements.
In August 2009, the FASB issued ASU No. 2009-04, “Accounting for Redeemable Equity Instruments – Amendment to
Section 480-10-S99.” The amended guidance represents technical changes to ASC 480, “Distinguishing Liabilities from
Equity,” to reflect SEC staff pronouncements on EITF Topic D-98, “Classification and Measurement of Redeemable
Securities.” The guidance provided in ASU No. 2009-04 is effective for the first reporting period, including interim periods,
beginning after issuance. ASU No. 2009-04 is effective for the Company’s first quarter of fiscal year ending September 26,
2010. We are currently evaluating the impact, if any, that the adoption of ASU No. 2009-04 will have on our consolidated
financial statements.
In August 2009, the FASB issued ASU No. 2009-05, “Measuring Liabilities at Fair Value,” which amends ASC 820, “Fair
Value Measurements and Disclosures.” ASU No. 2009-05 provides clarification for the valuation techniques available when
valuing a liability when a quoted price for an identical liability is not available, and clarifies that no adjustment is necessary
related to the existence of restrictions that prevent the transfer of the liability. The amendments in this update require the use
of valuation techniques that use the quoted price of an identical liability when traded as an asset, or quoted prices for similar