Cash America 2012 Annual Report Download - page 138

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
113
Recently Adopted Accounting Pronouncements
In September 2011, the FASB issued ASU No. 2011-08, Testing Goodwill for Impairment (“ASU 2011-08”).
This update is intended to simplify goodwill impairment testing by adding an optional qualitative review step to assess
whether the required quantitative impairment analysis that exists under generally accepted accounting principles in the
United States (“GAAP”) is necessary. Under ASU 2011-08, a company will not be required to calculate the fair value
of a reporting unit that contains recorded goodwill unless it concludes, based on the qualitative assessment, that it is
more likely than not (a likelihood of more than 50 percent) that the fair value of that reporting unit is less than its book
value. If such a decline in fair value is deemed more likely than not to have occurred, then the quantitative goodwill
impairment test that exists under current GAAP must be completed. If not, goodwill is deemed not impaired and no
further testing is required until the next annual test date, unless conditions or events before that date raise concerns of
potential impairment. The amended goodwill impairment guidance does not affect the manner in which a company
estimates fair value. The Company adopted ASU 2011-08 on January 1, 2012 and exercised its option to bypass the
qualitative assessment and utilized only a quantitative assessment in its annual goodwill assessment, which was
completed in June 2012, and its additional goodwill assessment completed in September 2012. See Notes 4 and 22.
The adoption of ASU 2011-08 did not have a material effect on the Company’s financial position or results of
operations.
In June 2011, the FASB issued ASU No. 2011-05, Presentation of Comprehensive Income (“ASU 2011-05”),
which enhances comparability between entities that report under GAAP and those that report under International
Financial Reporting Standards (“IFRS”). ASU 2011-05 requires companies to present the components of net income
and other comprehensive income either as one continuous statement or as two consecutive statements. It eliminates the
option to present components of other comprehensive income as part of the statement of equity. ASU 2011-05 is
effective for the Company’s interim and annual periods beginning after December 15, 2011 and must be applied
retrospectively. In December 2011, the FASB issued ASU No. 2011-12, Comprehensive Income (Topic 220): Deferral
of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other
Comprehensive Income in Accounting Standards Update No. 2011-05 ("ASU 2011-12"). ASU 2011-12 effectively
defers only those changes in ASU 2011-05 that relate to the presentation of reclassification adjustments out of
accumulated other comprehensive income. The Company adopted ASU 2011-05 and ASU 2011-12 on January 1, 2012
and the adoption did not have a material effect on its financial position or results of operations.
In May 2011, the FASB issued ASU No. 2011-04, Amendments to Achieve Common Fair Value Measurement
and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (“ASU 2011-04”),
which amends ASC 820, Fair Value Measurement (“ASC 820”). ASU 2011-04 provides a consistent definition and
measurement of fair value, as well as similar disclosure requirements between GAAP and IFRS. ASU 2011-04
changes certain fair value measurement principles, clarifies the application of existing fair value measurement and
expands the ASC 820 disclosure requirements, particularly for Level 3 fair value measurements. ASU 2011-04 is
effective for the Company prospectively for interim and annual periods beginning after December 15, 2011. The
Company adopted ASU 2011-04 on January 1, 2012 and the adoption did not have a material effect on its financial
position or results of operations.
Recently Issued Accounting Pronouncements
In July 2012, the FASB issued Accounting Standards Update (“ASU”) 2012-02, Intangibles—Goodwill and
Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment (“ASU 2012-02”). ASU 2012-02
provides companies with the option to assess qualitative factors to determine whether the existence of events and
circumstances indicates that it is more likely than not (a likelihood of more than 50 percent) that the indefinite-lived
intangible asset is impaired. If a company concludes that it is more likely than not that the asset is impaired, it is
required to determine the fair value of the intangible asset and perform the quantitative impairment test by comparing
the fair value with the carrying value in accordance with ASC 350, Intangibles—Goodwill and Other. If a company
concludes otherwise, no further quantitative assessment is required. ASU 2012-02 is effective for annual and interim
impairment tests performed for fiscal years beginning after September 15, 2012, although early adoption is permitted.