Adaptec 2008 Annual Report Download - page 46

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Based on the Notes outstanding as at December 28, 2008, additional interest expense arising from the
adoption of APB 14-1 is expected to be approximately $3 million annually. The debt discount is being accreted
over the term to the earliest date at which the holders of the Notes may exercise redemption rights, which is
October 15, 2012.
In December 2007, the FASB issued Statement of Financial Accounting Standard No. 141 (revised 2007),
Business Combinations, (“SFAS 141(R)”). SFAS 141(R) will change the accounting for acquisitions that close
beginning in 2009. More transactions and events will qualify as business combinations and will be accounted for
at fair value under the new standard. SFAS 141(R) promotes greater use of fair values in financial reporting.
Some of the changes will introduce more volatility into earnings. SFAS 141(R) is effective for fiscal years
beginning on or after December 15, 2008. We will apply this new standard on any future business combinations.
In December 2007, the FASB issued Statement of Financial Accounting Standard No. 160, Noncontrolling
Interests in Consolidated Financial Statements, (“SFAS 160”), an amendment of Accounting Research Bulletin
No. 51, (“ARB No. 51”). SFAS 160 will change the accounting and reporting for minority interests which will be
recharacterized as noncontrolling interests and classified as a component of equity. SFAS 160 is effective for
fiscal years beginning on or after December 15, 2008. SFAS 160 requires retroactive adoption of the presentation
and disclosure requirements for existing minority interests. There was no financial reporting impact due to this
new standard.
In December 2007, the FASB issued EITF Issue 07-1, Accounting for Collaborative Arrangements, (“EITF
07-1”). Collaborative arrangements are agreements between parties that participate in some type of joint
operating activity. The task force provided indicators to help identify collaborative arrangements and provides
for reporting of such arrangements on a gross or net basis pursuant to guidance in existing authoritative literature.
The task force also expanded disclosure requirements about collaborative arrangements. Conclusions within
EITF 07-1 are effective for fiscal years beginning December 15, 2008 and are to be applied retrospectively. We
do not expect the application of this standard to have a material impact on our financial position, results of
operations and cash flows.
In September 2006, the FASB issued Statement of Financial Accounting Standard No. 157, Fair Value
Measurements, which defines fair value, establishes a framework for measuring fair value in accordance with
generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS 157 is
effective for financial statements issued for fiscal years beginning after November 15, 2007. In February 2008,
the FASB issued FSP 157-2, Effective Date of FASB Statement No. 157, which delays the effective date of
SFAS 157 for non-financial assets and liabilities to fiscal years beginning after November 15, 2008. The
adoption of SFAS 157 related to financial assets and liabilities did not have a material impact on our
Consolidated Financial Statements. We are currently evaluating the impact, if any, that SFAS 157 may have on
our future Consolidated Financial Statements related to non-financial assets and liabilities.
In March 2008, the FASB issued Statement of Financial Accounting Standard No. 161, Disclosures about
Derivative Instruments and Hedging Activities, (“SFAS 161”), which is intended to improve financial reporting
about derivative instruments and hedging activities by requiring enhanced disclosures about the effects of an
entity’s derivative instruments and hedging activities on its financial position, financial performance, and cash
flows. SFAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after
November 15, 2008, with early application encouraged. We are currently assessing the potential impact that
SFAS 161 may have on its financial statements.
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