Avnet 2004 Annual Report Download - page 32

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future due to developments or a change in circumstances. Changes to reserves could increase or decrease
earnings in the period the changes are eÅective.
The Company does not consider revenue recognition to be a critical accounting policy due to the nature
of its business in which revenues are generally recognized when persuasive evidence of an arrangement exists,
delivery has occurred or services have been rendered, the sales price is Ñxed or determinable and collectibility
is reasonably assured. Generally these criteria are met upon the actual shipment of product to the customer.
Accordingly, other than for estimates related to possible returns of products from customers, discounts or
rebates, the recording of revenue does not require signiÑcant judgments or estimates. Furthermore, revenues
from maintenance contracts, which are deferred and recognized to income over the life of the agreement, are
not material to the consolidated results of operations of the Company.
Recently Issued Accounting Pronouncements
In December 2003, the FASB issued FASB Interpretation No. 46R (""FIN 46R''), Consolidation of
Variable Interest Entities, which is a revised Interpretation clarifying some of the provisions of the original
Interpretation No. 46 issued in January 2003. FIN 46R requires the consolidation of variable interest entities
(""VIEs''), as deÑned, based upon an assessment of a company's investment interests in the VIE as it relates to
the interests of other investors in the VIE. FIN 46R also includes certain disclosure requirements related to
any VIEs. The application of FIN 46R is required for any VIEs or potential VIEs commonly referred to as
special-purpose entities for periods ending after December 15, 2003. Application for all other types of VIEs is
required in Ñnancial statements for periods ending after March 15, 2004. The adoption of FIN 46R did not
have a material impact on the Company's consolidated Ñnancial statements.
In December 2003, the FASB revised Statement of Financial Accounting Standards No. 132
(""SFAS 132''), Employers' Disclosures about Pensions and Other Postretirement BeneÑts. The revised
SFAS 132 requires additional disclosures about plan assets, beneÑt obligations, cash Öows, beneÑt costs and
other relevant information related to pensions and other postretirement beneÑts. The disclosure requirements
of the revised SFAS 132 are eÅective for the Company for the Ñscal year ended July 3, 2004 and such
disclosures are included in Note 10 to the consolidated Ñnancial statements included in Item 15 of this Report.
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