Buffalo Wild Wings 2006 Annual Report Download - page 43

BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2006 and December 25, 2005
(Dollar amounts in thousands, except per-share amounts)
The expected term of the options represents the estimated period of time until exercise and is based on historical
experience of similar awards, giving consideration to the contractual terms, vesting schedules and expectations of future
employee behavior. Expected stock price volatility is based on historical volatility of our stock. The risk-free interest rate is
based on the implied yield available on U.S. Treasury zero-coupon issues with an equivalent remaining term. We have not
paid dividends in the past.
(x) New Accounting Pronouncements
In July 2006, the Financial Accounting Standards Board (FASB) issued Interpretation No. 48 (“FIN 48”), “Accounting
for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109”, which seeks to reduce the diversity in
practice associated with the accounting and reporting for uncertainty in income tax positions. This Interpretation prescribes a
comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax
positions taken or expected to be taken in income tax returns. FIN 48 is effective for fiscal years beginning after December
15, 2006 and we will adopt the new requirements in the first quarter of 2007. The cumulative effect, if any, of adopting FIN
48 will be recorded as an adjustment to retained earnings as of the beginning of the period of adoption. The adoption of FIN
48 is not expected to have a significant impact on our financial statements.
In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”), which defines fair
value, establishes a framework for measuring fair value in GAAP, and expands disclosures above fair value measurements.
SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods
within those fiscal years. Early adoption is permitted. We have not yet determined the effect on our financial statements, if
any, upon adoption of SFAS 157.
In September 2006, the SEC staff issued Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year
Misstatements when Quantifying Misstatements in Current Year Financial Statements” (“SAB 108”). The intent of SAB 108
is to reduce the diversity in practice for the method used to quantify financial statement misstatements, including the effect of
prior year uncorrected errors. SAB 108 establishes an approach that requires quantification of financial statement errors using
both an income statement and a cumulative balance sheet approach. SAB 108 is effective for fiscal years ending after
November 15, 2006, and we adopted the new requirements in fiscal 2006. The adoption of SAB 108 did not have a
significant impact on our consolidated financial statements.
(y) Reclassifications
Certain balances in prior fiscal years have been reclassified to conform to the presentation adopted in the current year.
The acquisition of property and equipment not yet paid for in the consolidated statements of cash flows for 2005 and
2004 has been reclassified as non-cash transactions. This reduced the amounts for the acquisition of property and equipment
by $82 for 2005 and $608 for 2004.
Tax withholding for restricted stock units in the consolidated statements of cash flows for 2005 was reclassified as a
non-cash transaction. The 2005 amount of $578 was previously netted as a cash flow from financing activities and is now
listed as a non-cash transaction.
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