Cash America 2007 Annual Report Download - page 46

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26
RECENT ACCOUNTING PRONOUNCEMENTS
In September 2006, FASB issued Statement of Financial Accounting Standards No. 157, “Fair Value
Measurements” (“SFAS 157”). SFAS 157 defines fair value to be the price that would be received to sell
an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date and emphasizes that fair value is a market-based measurement, not an entity-specific
measurement. It establishes a fair value hierarchy and expands disclosures about fair value measurements in
both interim and annual periods. SFAS 157 will be effective for fiscal years beginning after November 15,
2007 and interim periods within those fiscal years. In December 2007, FASB issued proposed FASB Staff
Position (“FSP”) FAS 157-b, which delays the effective date of SFAS 157 for nonfinancial assets and
nonfinancial liabilities that are recognized or disclosed in the financial statements on a nonrecurring basis.
The proposed FSP partially defers the effective date of SFAS 157 to fiscal years beginning after November
15, 2008, and interim periods within those fiscal years for items within the scope of this FSP. The Company
does not expect SFAS 157 to have a material effect on the Company’s financial position or results of
operations.
In February 2007, FASB issued Statement of Financial Accounting Standards No. 159, “The Fair
Value Option for Financial Assets and Financial Liabilities” (“SFAS 159”). SFAS 159 permits entities to
choose, at specified election dates, to measure eligible items at fair value (the “fair value option”) and
requires an entity to report unrealized gains and losses on items for which the fair value option has been
elected in earnings at each subsequent reporting date. Upfront costs and fees related to items for which the
fair value option is elected shall be recognized in earnings as incurred and not deferred. SFAS 159 will be
effective for fiscal years beginning after November 15, 2007. The Company does not expect SFAS 159 to
have a material effect on the Company’s financial position or results of operations.
In December 2007, FASB issued Statement of Financial Accounting Standards No. 141, “Business
Combinations – Revised” (“SFAS 141(R)”). SFAS 141(R) establishes principles and requirements for how
an acquirer in a business combination: recognizes and measures in its financial statements the identifiable
assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree; recognizes and
measures the goodwill acquired in the business combination or a gain from a bargain purchase price; and,
determines what information to disclose to enable users of the consolidated financial statements to evaluate
the nature and financial effects of the business combination. SFAS 141(R) applies prospectively 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. In the past, the Company has completed significant acquisitions.
The application of SFAS 141(R) will cause management to evaluate future transaction returns under
different conditions, particularly the near term and long term economic impact of expensing transaction
costs up front.