Audiovox 2005 Annual Report Download - page 75

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Assets", 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", requires that the
Company provide pro−forma information regarding net income
(loss) and net income
(loss) per common share as if compensation cost for the
Company's stock option programs had been determined in
accordance with the fair value method prescribed therein. The
Company adopted the disclosure portion of SFAS No. 148,
"Accounting for Stock−Based Compensation−Transition and
Disclosure" requiring more prominent pro−forma disclosures as
described in SFAS No. 123. The following table illustrates the
effect on net income (loss) and net income (loss) per common
share as if the Company had measured the compensation cost for
the Company's stock option programs under the fair value method
in each period presented:
YEARS ENDED NOVEMBER 30,
−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−
2003 2004 2005
−−−−−−−−−−−−−− −−−−−−−−−−−− −−−−−−−−−−−−−
Net income (loss):
As reported $11,239 $77,200 $(9,591)
Stock based compensation expense − − (490)
−−−−−−−−−−−−− −− −−−−−−−−−−−−
Pro−forma $11,239 $77,200 $(10,081)
======= ======= =========
Net income (loss) per common share (basic):
As reported $ 0.51 $ 3.52 $ (0.43)
Pro−forma $ 0.51 $ 3.52 $ (0.45)
Net income (loss) per common share (diluted):
As reported $ 0.51 $ 3.45 $ (0.43)
Pro−forma $ 0.51 $ 3.45 $ (0.45)
F−21