World Fuel Services 2008 Annual Report Download - page 70

Download and view the complete annual report

Please find page 70 of the 2008 World Fuel Services annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 108

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108

WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Effective Date of FASB Statement No. 157. In February 2008, the FASB released FSP No. FAS 157-2,
“Effective Date of FASB Statement No. 157,” which delayed the effective date of FAS No. 157 for all
nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the
financial statements on a recurring basis (at least annually), to January 1, 2009. FAS No. 157 defines fair value,
establishes guidelines for measuring fair value and expands disclosures regarding fair value measurements. We
do not expect the adoption of FAS No. 157 for our nonfinancial assets and liabilities, primarily our goodwill and
intangible assets, to have a material impact on our financial position, results of operations or cash flows.
Business Combinations. In December 2007, the FASB issued FAS No. 141(R), “Business Combinations,”
which is intended to improve, simplify, and converge internationally the accounting for business combinations
and the reporting of noncontrolling interests in consolidated financial statements. Under FAS No. 141(R), an
acquiring entity will be required to recognize all of the assets acquired and liabilities assumed in a transaction at
the acquisition date fair value with limited exceptions. FAS No. 141(R) includes a substantial number of new
disclosure requirements. FAS No. 141(R) applies prospectively to business combinations for which the
acquisition date is on or after the beginning of the first annual reporting period beginning on or after
December 15, 2008, and early adoption is prohibited. The impact on us of the adoption of FAS No. 141(R) will
depend on the nature, terms and size of business combinations completed on or after January 1, 2009.
Noncontrolling Interests in Consolidated Financial Statements. In December 2007, the FASB issued FAS
No. 160, “Noncontrolling Interests in Consolidated Financial Statements – An Amendment of ARB No. 51,”
which establishes new accounting and reporting standards for the noncontrolling interest in a subsidiary and for
the deconsolidation of a subsidiary. FAS No. 160 is intended to improve the relevance, comparability and
transparency of financial information provided to investors by requiring all entities to report noncontrolling
interests in subsidiaries in the same way as equity is reported in the consolidated financial statements. FAS
No. 160 includes expanded disclosure requirements regarding the interests of the parent and its noncontrolling
interest. FAS No. 160 is effective for fiscal years and interim periods within those fiscal years beginning on or
after December 15, 2008, and early adoption is prohibited. We are currently evaluating the impact, if any, that
FAS No. 160 will have on our consolidated financial statements.
Income Tax Benefits of Dividends on Share-Based Payment Awards. Effective January 1, 2008, we adopted
Emerging Issues Task Force (“EITF”) Issue No. 06-11, “Accounting for Income Tax Benefits of Dividends on
Share-Based Payment Awards.” EITF 06-11 requires companies to recognize a realized income tax benefit
associated with dividends or dividend equivalents paid on non-vested equity-classified employee share-based
payment awards that are charged to retained earnings as an increase to additional capital in excess of par value.
The adoption of EITF 06-11 did not have a material impact on our financial position, results of operations or cash
flows.
2. Short-Term Investments
At December 31, 2008 and 2007, our short-term investments consisted of $8.1 million of commercial paper
with a par value of $10.0 million. The commercial paper, which was investment grade when purchased, was
originally classified as a cash equivalent at its original maturity date of August 23, 2007, which was less than 90
days from the date of purchase. On the maturity date of the investment, the issuer of the commercial paper
defaulted on its repayment obligation. As a result, the commercial paper has been reclassified from cash
equivalents to short-term investments. The commercial paper is classified as a short-term investment as of
December 31, 2008 based on information available to us that suggests that it is likely there will be a cash
settlement of the commercial paper within one year. Changes in facts and circumstances in future periods could
lead to changes in the expected settlement date of the commercial paper balances. Accordingly, there may be
changes in our classification of such balances from short-term to long-term.
62