Callaway 2008 Annual Report Download - page 87

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From time to time, the Company enters into foreign currency exchange contracts and put or call options for
the purpose of hedging foreign exchange rate exposures on existing or anticipated transactions. In the event of a
failure to honor one of these contracts by one of the banks with which the Company has contracted, management
believes any loss would be limited to the exchange rate differential from the time the contract was made until the
time it was settled.
Recent Accounting Pronouncements
In December 2008, the FASB issued FASB Staff Position (“FSP”) FAS 140-4 and FIN 46(R)-8,
“Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable
Interest Entities.” This FSP requires additional disclosures by public companies about transfers of financial
assets and interests in variable interest entities. The FSP amends both FASB Statement No. 140, “Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities”, and FASB Interpretation No. 46
(Revised December 2003), “Consolidation of Variable Interest Entities” to require (i) additional disclosures
about transferors’ continuing involvements with transferred financial assets; (ii) additional disclosures about a
public entities’ (including sponsors) involvement with variable interest entities; (iii) disclosures by a public
enterprise that is: (a) a sponsor of a qualifying special-purpose entity (SPE) that holds a variable interest in the
qualifying SPE but was not the transferor of financial assets to the qualifying SPE; and (b) a servicer of a
qualifying SPE that holds a significant variable interest in the qualifying SPE but was not the transferor of
financial assets to the qualifying SPE. This FSP is effective for annual and interim reporting periods that end
after December 15, 2008. Based on the Company’s evaluation of this FSP, the adoption of this standard did not
have a material impact on the Consolidated Financial Statements of the Company.
In October 2008, the FASB Issued FSP No. 157-3, “Determining the Fair Value of a Financial Asset When the
Market for That Asset Is Not Active” (“FSP No. 157-3”). FSP No. 157-3 clarifies the application of FASB
Statement No. 157, “Fair Value Measurements,” in a market that is not active and provides an example to illustrate
key considerations in determining the fair value of a financial asset when the market for that financial asset is not
active. FSP No. 157-3 is effective upon issuance. Based on the Company’s evaluation of FSP No. 157-3, the
adoption of this standard did not have a material impact on the Consolidated Financial Statements of the Company.
In September 2008, the FASB issued FSP No. 133-1 and FIN 45-4, “Disclosures about Credit Derivatives and
Certain Guarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation No. 45; and Clarification
of the Effective Date of FASB Statement No. 161” (“FSP No. 133-1 and FIN 45-4”). FSP No. 133-1 and FIN 45-4
are intended to improve disclosures about credit derivatives by requiring more information about the potential
adverse effects of changes in credit risk on the financial position, financial performance, and cash flows of the
sellers of credit derivatives. It amends FASB Statement No. 133, “Accounting for Derivative Instruments and
Hedging Activities,” to require disclosures by sellers of credit derivatives, including credit derivatives embedded in
hybrid instruments. FSP No. 133-1 and FIN 45-4 are effective for annual and interim reporting periods beginning
after November 15, 2008. The Company is currently evaluating the impact, if any, that the adoption of FSP
No. 133-1 and FIN 45-4 will have on the Consolidated Financial Statements of the Company.
In June 2008, the FASB issued FSP No. EITF 03-6-1, “Determining Whether Instruments Granted in Share-
Based Payment Transactions Are Participating Securities.” This FSP provides that unvested share-based
payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid)
are participating securities and shall be included in the computation of earnings per share pursuant to the
two-class method. The FSP is effective for financial statements issued for interim periods and fiscal years
beginning after December 15, 2008. Upon adoption, companies are required to retrospectively adjust its earnings
per share data (including any amounts related to interim periods, summaries of earnings and selected financial
data) to conform with the provisions in this FSP. The Company is currently evaluating the impact, if any, that the
adoption of this FSP will have on the Consolidated Financial Statements of the Company.
In April 2008, the FASB issued FSP No. FAS 142-3, “Determination of the Useful Life of Intangible
Assets”. This FSP amends the factors that should be considered in developing renewal or extension assumptions
F-13