Audiovox 2004 Annual Report Download - page 75

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AUDIOVOX CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
November 30, 2002, 2003 and 2004
(Dollars in thousands, except share and per share data)
Stock options and stock warrants totaling 2,234,756, 1,540,000 and
366,250 for the years ended November 30, 2002, 2003 and 2004,
respectively, were not included in the net income (loss) per common
share calculation because the exercise price of these options and
warrants were greater than the average market price of common stock
during the period or these options and warrants were anti−dilutive.
(r) Supplementary Financial Statement Information
Interest income of $509, $516 and $823 for the years ended November
30, 2002, 2003 and 2004, respectively, is included in other, net, in
the accompanying consolidated statements of operations.
(s) Accounting for the Impairment of Long−Lived Assets and for Long−Lived
Assets to be Disposed of
Effective December 1, 2002, the Company adopted SFAS No. 144,
"Accounting for the Impairment or Disposal of Long−Lived Assets",
which establishes accounting and reporting standards for the
impairment or disposal of long−lived assets. SFAS No. 144 removes
goodwill from its scope and retains the requirements of SFAS No. 121,
"Accounting for the Impairment of Long−Lived Assets and for Long−Lived
Assets to be Disposed of", regarding the recognition of impairment
losses on long−lived assets held for use.
Long−lived assets and certain identifiable intangibles are reviewed
for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable.
Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of an asset to future undiscounted
net cash flows expected to be generated by the asset. Recoverability
of assets held for sale is measured by comparing the carrying amount
of the assets to their estimated fair market value. If such assets are
considered to be impaired, the impairment to be recognized is measured
by the amount by which the carrying amount of the assets exceed the
fair value of the assets.
(t) Accounting for Stock−Based Compensation
The Company applies the intrinsic value method as outlined in
Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees" (APB No. 25), and related interpretations in
accounting for stock options and share units granted under these
programs. Under the intrinsic value method, no compensation expense is
recognized if the exercise price of the Company's employee stock
options equals the market price of the underlying stock on the date of
grant. SFAS No. 123, "Accounting for Stock−Based Compensation",
72