Adobe 2007 Annual Report Download - page 74

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Recent Accounting Pronouncements
In December 2007, the FASB issued SFAS No. 141 (revised 2007) (“SFAS 141R”), “Business Combinations” and
SFAS No. 160 (“SFAS 160”), “Noncontrolling Interests in Consolidated Financial Statements, an amendment of Accounting
Research Bulletin No. 51”. SFAS 141R will change how business acquisitions are accounted for and will impact financial
statements both on the acquisition date and in subsequent periods. 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
141R and SFAS 160 are effective for us beginning in the first quarter of fiscal 2010. Early adoption is not permitted. We are
currently evaluating the impact that SFAS 141R and SFAS 160 will have on our consolidated financial statements.
In June 2007, the AICPA issued Statement of Position 07-1 (“SOP 07-1”), “Clarification of the Scope of the Audit and
Accounting Guide Investment Companies and Accounting by Parent Companies and Equity Method Investors for
Investments in Investment Companies”. SOP 07-1 defines investment companies for purposes of applying the related AICPA
Audit and Accounting Guide. SOP 07-1 provides guidance on whether an investment company’ s parent or equity-method
investor should retain investment-company accounting in its financial statements. SOP 07-1 would be effective beginning in
the first quarter of fiscal 2009; however, on November 16, 2007, the FASB issued proposed FASB Staff Position (“FSP”)
SOP 07-1-a which would indefinitely delay the effective date of SOP 07-1. We are currently evaluating the impact, if any,
that SOP 07-1 will have on our consolidated financial statements.
In February 2007, the FASB issued SFAS No. 159 (“SFAS 159”), “The Fair Value Option for Financial Assets and
Financial Liabilities”. Under SFAS 159, companies may elect to measure certain financial instruments and certain other items
at fair value. The standard requires that unrealized gains and losses on items for which the fair value option has been elected
be reported in earnings. SFAS 159 is effective for us beginning in the first quarter of fiscal 2008.
In September 2006, the FASB issued SFAS No. 157 (“SFAS 157”), “Fair Value Measurements,” which defines fair
value, establishes guidelines for measuring fair value and expands disclosures regarding fair value measurements. SFAS 157
does not require any new fair value measurements but rather eliminates inconsistencies in guidance found in various prior
accounting pronouncements. SFAS 157 is effective for fiscal years beginning after November 15, 2007. However, on
December 14, 2007, the FASB issued proposed FSP FAS 157-b which would delay the effective date of SFAS 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). This proposed FSP partially defers the effective date of Statement 157 to
fiscal years beginning after November 15, 2008, and interim periods within those fiscal years for items within the scope of
this FSP. Effective for fiscal 2008, we will adopt SFAS 157 except as it applies to those nonfinancial assets and nonfinancial
liabilities as noted in proposed FSP FAS 157-b. The partial adoption of SFAS 157 will not have a material impact on our
consolidated financial position, results of operations or cash flows.
In September 2006, the FASB issued SFAS No. 158 (“SFAS 158”), “Employers’ Accounting for Defined Benefit
Pension and Other Postretirement Plans—An Amendment of FASB No. 87, 88, 106 and 132(R)”. SFAS 158 requires that the
funded status of defined benefit postretirement plans be recognized on the company’ s balance sheet and changes in the
funded status be reflected in comprehensive income. SFAS 158 provides recognition and disclosure elements to be effective
as of the end of the fiscal year after December 15, 2006 and measurement elements to be effective for fiscal years ending
after December 15, 2008. In the fiscal year ended November 30, 2007, we adopted the recognition and disclosure elements
of SFAS 158 which did not have a material effect on our consolidated financial position, results of operations or cash flows.
In addition, we will adopt the measurement elements of SFAS 158 in fiscal 2009. We do not expect the adoption of the
measurement elements to have a material impact on our consolidated financial position, results of operations or cash flows.
In July 2006, the FASB issued Financial Interpretation No. 48 (“FIN 48”), "Accounting for Uncertainty in Income
Taxes, an interpretation of FASB Statement No. 109". FIN 48 clarifies the accounting for uncertainty in income taxes by
prescribing the recognition threshold a tax position is required to meet before being recognized in the financial statements. It
also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and
transition. FIN 48 is effective for fiscal years beginning after December 15, 2006 and as a result, is effective our first quarter
of fiscal 2008. The cumulative effects, if any, of applying FIN 48 will be recorded as an adjustment to retained earnings as of
the beginning of the period of adoption. Additionally, in May 2007, the FASB published FSP No. FIN 48-1 (“FSP FIN 48-
1”), "Definition of Settlement in FASB Interpretation No. 48". FSP FIN 48-1 is an amendment to FIN 48. It clarifies how an
enterprise should determine whether a tax position is effectively settled for the purpose of recognizing previously