Avnet 2006 Annual Report Download - page 61

Download and view the complete annual report

Please find page 61 of the 2006 Avnet annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 98

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98

AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (Continued)
currently evaluating the impact of FIN 48 on its consolidated financial statements, which will be adopted
beginning fiscal 2008.
In March 2006, the FASB issued Emerging Issues Task Force 06-03, How Taxes Collected from
Customers and Remitted to Governmental Authorities Should Be Presented in the Income Statement (That is,
Gross versus Net Presentation)(""EITF 06-03''), which clarifies how a company discloses its recording of taxes
collected that are imposed on revenue producing activities. EITF 06-03 is effective for the first interim
reporting period beginning after December 15, 2006. The Company is evaluating the impact of EITF 06-03 on
its consolidated financial statements, which will be adopted beginning third quarter of fiscal 2007.
In March 2006, FASB issued Statement of Financial Accounting Standard No. 156, Accounting for
Servicing of Financial Assets Ì an Amendment of FASB Statement No. 140'' (""SFAS 156''). SFAS 156
provides guidance on the accounting for servicing assets and liabilities when an entity undertakes an obligation
to service a financial asset by entering into a servicing contract. This statement is effective for all transactions
at the beginning of fiscal 2008. The adoption of SFAS 156 is not expected to have a material impact on the
Company's consolidated financial condition or results of operations.
In February 2006, the FASB issued SFAS No. 155, Accounting for Certain Hybrid Financial
Instruments Ì an Amendment of FASB Statements No. 133 and 140 (""SFAS 155''). SFAS 155 allows
financial instruments that contain an embedded derivative and that otherwise would require bifurcation to be
accounted for as a whole on a fair value basis, at the holders' election. SFAS 155 also clarifies and amends
certain other provisions of SFAS 133 and SFAS 140. SFAS 155 is effective beginning fiscal 2008. The
adoption of SFAS 155 is not expected to have a material effect on the Company's consolidated financial
statements.
In May 2005, the FASB issued Statement of Financial Accounting Standard No. 154 (""SFAS 154''),
Accounting Changes and Error Corrections. SFAS 154 applies to all voluntary changes in accounting principle
as well as to changes required by an accounting pronouncement that does not include specific transition
provisions. SFAS 154 eliminates the requirement in Accounting Principles Board Opinion No. 20, Accounting
Changes, to include the cumulative effect of changes in accounting principle in the income statement in the
period of change and, instead, requires changes in accounting principle to be retrospectively applied.
Retrospective application requires the new accounting principle to be applied as if the change occurred at the
beginning of the first period presented by modifying periods previously reported, if an estimate of the prior
period impact is practicable and estimable. SFAS 154 is effective for accounting changes and corrections of
errors made in fiscal years beginning after December 15, 2005. The Company does not currently anticipate
any changes in accounting principle other than the adoption of SFAS 123R discussed below, which has its
own adoption transition provisions and is therefore not in the scope of SFAS 154. As a result, Avnet does not
believe the adoption of SFAS 154 will have a material impact on the Company's consolidated financial
statements.
In March 2005, the FASB issued Interpretation No. 47, Accounting for Conditional Asset Retirement
Obligation (""FIN 47''), which is an interpretation of SFAS No. 143, Accounting for Asset Retirement
Obligation. FIN 47 clarifies that an entity is required to recognize a liability for the fair value of a conditional
asset retirement obligation if the fair value can be reasonably estimated even though uncertainty exists about
the timing or method of settlement. The adoption of FIN 47 in fiscal 2006 did not have a material impact on
the Company's consolidated financial statements.
Effective in the first quarter of fiscal 2006, the Company adopted SFAS 123R which revises
SFAS No. 123, and supersedes APB Opinion No. 25. SFAS 123R requires all share-based payments to
employees, including grants of employee stock options, be measured at fair value and expensed in the
consolidated statement of operations over the service period (generally the vesting period). Upon adoption,
the Company transitioned to SFAS 123R using the modified prospective application, whereby compensation
55