8x8 2009 Annual Report Download - page 45

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43
In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities"
("SFAS No. 159") which permits entities to choose to measure many financial instruments and certain other items at fair value
that are not currently required to be measured at fair value. The adoption of SFAS No. 159 did not have a material effect on our
condensed consolidated results of operations and financial condition.
In December 2007, the FASB issued SFAS No. 141(Revised 2007), "Business Combinations" ("SFAS No. 141(R)"). SFAS
No. 141(R) significantly changes the accounting for business combinations in a number of areas including the treatment of
contingent consideration, acquired contingencies, transaction costs, in-process research and development and restructuring
costs. In addition, under SFAS No. 141(R), changes in an acquired entity's deferred tax assets and uncertain tax positions after
the measurement period will impact income tax expense. SFAS 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. Earlier adoption is prohibited. We will adopt this pronouncement in the first quarter of fiscal 2010 and do not expect the
adoption of SFAS No. 141(R) will have a material impact on our consolidated results of operations and financial condition.
In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interest in Consolidated Financial Statements an
Amendment of ARB No. 51" ("SFAS No. 160"), which establishes new accounting and reporting standards for the
noncontrolling interest in a subsidiary, changes in a parent's ownership interest in a subsidiary and the deconsolidation of a
subsidiary. SFAS No. 160 is effective for fiscal years beginning on or after December 15, 2008. Earlier adoption is prohibited.
We will adopt this pronouncement in the first quarter of fiscal 2010 and do not expect the adoption of SFAS No. 160 will have
a material impact on our consolidated results of operations and financial condition.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The primary objective of our investment activities is to preserve principal while maximizing income without significantly
increasing risk. Some of the securities in which we invest may be subject to market risk. This means that a change in prevailing
interest rates may cause the principal amount of the investment to fluctuate. To minimize this risk, we may maintain our
portfolio of cash equivalents and investments in a variety of securities, including commercial paper, money market funds, debt
securities and certificates of deposit. The risk associated with fluctuating interest rates is limited to our investment portfolio
and we do not believe that a 10% change in interest rates would have a significant impact on our interest income.
During the years ended March 31, 2009 and 2008, we did not have any outstanding debt instruments other than equipment
under capital leases and, therefore, we were not exposed to market risk relating to interest rates.