Callaway 2008 Annual Report Download - page 88

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used to determine the useful life of a recognized intangible asset under FASB Statement No. 142, “Goodwill and
Other Intangible Assets”. The intent of this FSP is to improve the consistency between the useful life of a
recognized intangible asset under Statement 142, the period of expected cash flows used to measure the fair value
of the asset under FASB Statement No. 141R, and other U.S. generally accepted accounting principles. This FSP
is effective for financial statements issued for interim periods and fiscal years beginning after December 15,
2008. 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 March 2008, the FASB issued Statement No. 161, “Disclosures about Derivative Instruments and
Hedging Activities—an amendment of FASB Statement No. 133” (“SFAS No. 161”). SFAS No. 161 requires
companies to provide enhanced disclosures regarding derivative instruments and hedging activities. It requires
companies to better convey the purpose of derivative use in terms of the risks that such company is intending to
manage. Disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments
and related hedged items are accounted for under SFAS No. 133 and its related interpretations, and (c) how
derivative instruments and related hedged items affect a company’s financial position, financial performance, and
cash flows are required. SFAS No. 161 retains the same scope as SFAS No. 133 and is effective for fiscal years
and interim periods beginning after November 15, 2008. The Company is currently evaluating the impact, if any,
that the adoption of SFAS No. 161 will have on the Consolidated Financial Statements of the Company.
In December 2007, the FASB issued Statement No. 160, “Noncontrolling Interests in Consolidated
Financial Statements—an amendment of Accounting Research Bulletin (“ARB”) No. 51” (“SFAS No. 160”).
SFAS No. 160 amends ARB No. 51 to establish accounting and reporting standards for the noncontrolling
interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a
subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated
financial statements. Additionally, SFAS No. 160 requires that consolidated net income include the amounts
attributable to both the parent and the noncontrolling interest. SFAS No. 160 is effective for interim periods
beginning on or after December 15, 2008. The Company is currently evaluating the impact, if any, that the
adoption of SFAS No. 160 will have on the Consolidated Financial Statements of the Company.
In December 2007, the FASB issued Statement No. 141R, “Business Combinations (a revision of Statement
No. 141)” (“SFAS No. 141R”). SFAS No. 141R applies to all transactions or other events in which an entity
obtains control of one or more businesses, including those combinations achieved without the transfer of
consideration. SFAS No. 141R retains the fundamental requirements in Statement No. 141 that the acquisition
method of accounting be used for all business combinations. SFAS No. 141R expands the scope to include all
business combinations and requires an acquirer to recognize the assets acquired, the liabilities assumed, and any
noncontrolling interest in the acquiree at their fair values as of the acquisition date. Additionally, SFAS No. 141R
changes the way entities account for business combinations achieved in stages by requiring the identifiable assets
and liabilities to be measured at their full fair values. Additionally, contractual contingencies and contingent
consideration shall be measured at fair value at the acquisition date. SFAS No. 141R is effective on a prospective
basis to business combinations for which the acquisition date is on or after the beginning of the first annual
reporting period beginning on or after December 15, 2008. The Company will apply the provisions of SFAS
No. 141R for all acquisitions completed after December 31, 2008.
Note 3. Investments
Investment in Golf Entertainment International Limited Company
The Company has a $10,000,000 investment in the Preferred Shares of Golf Entertainment International
Limited (“GEI”), the owner and operator of TopGolf entertainment centers. The Company accounts for this
investment under the cost method in accordance with the provisions of APB Opinion No. 18, “The Equity
Method of Accounting for Investments in Common Stock” and reflected the balance in other long-term assets in
the accompanying consolidated balance sheet as of December 31, 2008 and 2007.
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