Circuit City 2007 Annual Report Download - page 24

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In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”)
No. 157
“Fair Value Measurements” which is effective for fiscal years beginning after November 15, 2007. This statement was issued to
increase consistency and comparability in fair value measurements and for expanded disclosures about fair value measurements. The Company
is currently evaluating the potential impact, if any, of this pronouncement.
In February 2007, the FASB issued SFAS No. 159 “The Fair Value Option for Financial Assets and Financial Liabilities (including an
amendment of FASB Statement No. 115)” which is effective for fiscal years beginning after November 15, 2007. This interpretation was issued
to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related
assets and liabilities differently without having to apply complex hedge accounting provisions. The Company is currently evaluating the
potential impact, if any, of this pronouncement.
In December 2007, the FASB issued SFAS No. 141R, “Business Combinations,” which replaces FASB Statement 141. SFAS No.141R retains
the requirement that the acquisition method of accounting be used for business combinations. The objective of SFAS No. 141R is to improve the
relevance, representational faithfulness and comparability that reporting entities provide in their financial reports about business combinations
and their effects. SFAS 141R establishes principles and requirements for how an acquirer 1) recognizes and measures identifiable assets
acquired, the liabilities assumed and any noncontrolling interest in the acquiree, 2) recognizes and measures the goodwill acquired in the
combination or a gain from a bargain purchase and 3) determines what information to disclose to enable users of the financial statements to
evaluate the nature and financial effects of the business combination. SFAS No. 141R is effective for business combinations for which the
acquisition date is on or after the beginning of the first annual reporting period beginning after December 15, 2008. The Company is currently
evaluating the potential impact, if any, of this pronouncement.
In December 2007, the FASB issued SFAS No. 160, “Accounting and Reporting of Noncontrolling Interest” (“SFAS No. 160”).
The objective of
SFAS 160 is to improve the relevance, comparability and transparency of the financial information that reporting entities provide related to
noncontrolling interests, sometimes referred to as minority interests. SFAS No. 160 requires, among other things, that noncontrolling interests be
shown separately in the consolidated entity’s equity section of the balance sheet. SFAS No. 160 also establishes accounting and reporting
standards for ownership interest in subsidiaries held by parties other than the parent, for presentation of amounts of consolidated net income
attributable to the parent and the noncontrolling interest, for consistency in accounting for changes in a parent’s ownership interest when the
parent retains a controlling interest, for the valuation of retained noncontrolling equity interests when a subsidiary is deconsolidated and for
providing sufficient disclosure that identifies and distinguishes the interests of the parent and the interests of the noncontrolling owners. SFAS
No. 160 is effective beginning January 1, 2009. The Company is currently evaluating the potential impact, if any, of this pronouncement.
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