Citrix 2007 Annual Report Download - page 118

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CITRIX SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SFAS No. 157 does not require any new fair value measurements but rather eliminates inconsistencies in guidance
found in various prior accounting pronouncements. SFAS No. 157 is effective for fiscal years beginning after
November 15, 2007. Earlier adoption is permitted, provided the company has not yet issued financial statements,
including for interim periods, for that fiscal year. The Company does not expect that the adoption of SFAS No. 157
will have a material impact on the Company’s consolidated financial position, results of operations or cash flows.
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and
Financial Liabilities. SFAS No. 159 permits companies to choose to measure certain financial instruments and
certain other items at fair value. The standard requires that unrealized gains and losses on items for which the fair
value option has been elected be reported in earnings. SFAS No. 159 is effective for the Company beginning in
the first quarter of fiscal year 2008, although earlier adoption is permitted. The adoption of SFAS No. 159 will
not have a material impact on the Company’s consolidated financial statements.
In December 2007, the FASB issued SFAS No. 141R, Business Combinations, SFAS No. 141R will require,
among other things, the expensing of direct transaction costs, including deal costs and restructuring costs as
incurred, acquired IPR&D assets to be capitalized, certain contingent assets and liabilities to be recognized at fair
value and earn-out arrangements, including contingent consideration, may be required to be measured at fair
value until settled, with changes in fair value recognized each period into earnings. In addition, material
adjustments made to the initial acquisition purchase accounting will be required to be recorded back to the
acquisition date. This will cause companies to revise previously reported results when reporting comparative
financial information in subsequent filings. SFAS No. 141R is effective for the Company on a prospective basis
for transactions occurring in 2009 and earlier adoption is not permitted. SFAS No 141R may have a material
impact on the Company’s consolidated financial position, results of operations and cash flows if it enters into
material business combinations after the standard’s effective date.
In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial
Statements, SFAS No. 160 will change the accounting for and reporting of minority interests. Under the new
standard, minority interests, will be referred to as noncontrolling interests and will be reported as equity in the
parent company’s consolidated financial statements. Transactions between the parent company and the
noncontrolling interests will be treated as transactions between shareholders provided that the transactions do not
create a change in control. Gains and losses will be recognized in earnings for transactions between the parent
company and the noncontrolling interests, unless control is achieved or lost. SFAS No. 160 requires retrospective
adoption of the presentation and disclosure requirements for existing minority interests. All other requirements of
SFAS No. 160 shall be applied prospectively. SFAS No. 160 is effective for the Company beginning in the first
quarter of fiscal year 2009 and earlier adoption is not permitted. SFAS No. 160 may have a material impact on
the Company’s consolidated financial position, results of operations and cash flows if it enters into material
transactions or acquires a noncontrolling interest after the standard’s effective date.
16. RELATED PARTY TRANSACTIONS
The Sevin Rosen Funds, a venture capital firm, was a stockholder in XenSource. Stephen Dow, a member of
the Company’s Board of Directors, is a general partner of the Sevin Rosen Funds and did not directly hold any
interest in XenSource. Although the Sevin Rosen Funds were represented on the Board of Directors of
XenSource, Mr. Dow was not a director of XenSource. The Company’s acquisition of XenSource provided a
return to all the partners of the Sevin Rosen Funds, including Mr. Dow. The allocation of XenSource purchase
price to Mr. Dow through the general partner entities of the Sevin Rosen Funds related to the acquisition of
XenSource will be approximately $1.9 million if and when the Sevin Rosen funds distribute each allocations to
its general partner entities. Mr. Dow has been on the Company’s Board of Directors since 1989 and currently
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