Adobe 2009 Annual Report Download - page 85

ADOBE SYSTEMS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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In May 2009, the FASB issued new standards for subsequent events, which establishes general standards of accounting
for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available
to be issued. The new standards are effective for interim and annual reporting periods ending after June 15, 2009. We adopted
the new standards during the third quarter of fiscal 2009 and, as the pronouncement only requires additional disclosures, the
adoption did not have an impact on our consolidated financial position, results of operations or cash flows. We have
evaluated subsequent events through January 22, 2010, the date that these financial statements were issued.
In April 2009, the FASB issued new standards for the recognition and measurement of other-than-temporary
impairments for debt securities which replaced the pre-existing “intent and ability” indicator. These new standards specify
that if the fair value of a debt security is less than its amortized cost basis, an other-than-temporary impairment is triggered in
circumstances where (1) an entity has an intent to sell the security, (2) it is more likely than not that the entity will be
required to sell the security before recovery of its amortized cost basis, or (3) the entity does not expect to recover the entire
amortized cost basis of the security (that is, a credit loss exists). Other-than-temporary impairments are separated into
amounts representing credit losses which are recognized in earnings and amounts related to all other factors which are
recognized in other comprehensive income (loss). We adopted these standards in the third quarter of fiscal 2009 and they did
not have a material effect on our consolidated financial position, results of operations or cash flows.
In April 2009, the FASB issued new standards which provide guidance on how to determine the fair value of assets and
liabilities when the volume and level of activity for the asset or liability has significantly decreased. These new standards also
provide guidance on identifying circumstances that indicate a transaction is not orderly. In addition, we are required to
disclose in interim as well as annual reporting periods the inputs and valuation techniques used to measure fair value and
discussion of changes in valuation techniques. We adopted these standards in the third quarter of fiscal 2009 and they did not
have a material effect on our consolidated financial position, results of operations or cash flows.
In September 2008, the FASB issued additional guidance which requires additional disclosures by sellers of credit
derivatives, including credit derivatives embedded in hybrid instruments. This new guidance also amends previous guidance
related to accounting for guarantees to require additional disclosure about the current status of the payment/performance risk
of a guarantee. These new provisions are effective for reporting periods ending after November 15, 2008. These provisions
further clarify the effective date of new disclosure requirements regarding derivative instruments and hedging activities. We
adopted these disclosures requirements in the first quarter of fiscal 2009. Since the new guidance only required additional
disclosures, the adoption did not impact our consolidated financial position, results of operations or cash flows.
In April 2008, the FASB issued new standards which provided guidance on how to determine the useful life of
intangible assets by amending the factors an entity should consider in developing renewal or extension assumptions used in
determining the useful life of recognized intangible assets. This new guidance applies prospectively to intangible assets that
are acquired individually or with a group of other assets in business combinations and asset acquisitions. These standards are
effective for financial statements issued for fiscal years beginning after December 15, 2008 and interim periods within those
fiscal years and is effective for us beginning in the first quarter of fiscal 2010. Early adoption is not permitted. As this
guidance is to be applied prospectively, on adoption, there will be no impact to our current consolidated financial statements.
In March 2008, the FASB issued new standards which requires companies with derivative instruments to disclose
information that should enable financial statement users to understand how and why a company uses derivative instruments,
how derivative instruments and related hedged items are accounted for and how derivative instruments and related hedged
items affect a company’s financial position, financial performance and cash flows. We adopted these new standards in the
first quarter of fiscal 2009. Since the new standards only required additional disclosure, the adoption did not impact our
consolidated financial position, results of operations or cash flows. See Note 5 for further information regarding derivative
instruments and related hedged items.
In December 2007, the FASB revised their guidance for business combinations and non-controlling interests. The new
standards will change how business acquisitions are accounted for and will impact financial statements both on the
acquisition date and in subsequent periods. The changes also impact the accounting and reporting for minority interests,
which will be recharacterized as non-controlling interests and classified as a component of equity. The new standards are
effective for us beginning in the first quarter of fiscal 2010. Early adoption is not permitted. We are currently evaluating the
impact the new standards will have on our consolidated financial statements however, we currently believe that depending on
the size and frequency of acquisitions, the adoption of these standards may have a material effect on our future consolidated
financial statements as more costs associated with acquisitions will be required to be expensed rather than accounted for as
part of the purchase price.