Coach 2010 Annual Report Download - page 56

TABLE OF CONTENTS
COACH, INC.
Notes to Consolidated Financial Statements
(dollars and shares in thousands, except per share data)
2. SIGNIFICANT ACCOUNTING POLICIES – (continued)
Subsequent Event Evaluation
The Company evaluated subsequent events through the date these financial statements were issued, and concluded there were no events
to recognize or disclose.
Recent Accounting Pronouncements
Accounting Standards Codification 820-10 “ Fair Value Measurements and Disclosures,” (“ASC 820-10”) was amended in January
2010 to require additional disclosures related to recurring and nonrecurring fair value measurements. The guidance requires disclosure of
transfers of assets and liabilities between Levels 1 and 2 of the fair value hierarchy, including the reasons and the timing of the transfers,
and information on purchases, sales, issuances, and settlements on a gross basis in the reconciliation of the assets and liabilities measured
under Level 3 of the fair value hierarchy. The guidance was effective for the Company beginning on December 27, 2009, except for certain
disclosures about purchases, sales, issuances, and settlements related to Level 3 fair value measurements, which were effective for the
Company beginning on January 2, 2011. The disclosure guidance adopted on December 27, 2009 and January 2, 2011 did not have a
material impact on our consolidated financial statements.
In May 2011, ASC 820-10 was further amended to clarify certain disclosure requirements and improve consistency with international
reporting standards. This amendment is to be applied prospectively and is effective for the Company beginning January 1, 2012. The
Company does not expect its adoption to have a material effect on its consolidated financial statements.
Accounting Standards Codification Topic 220, “Comprehensive Income,” was amended in June 2011 to require entities to present the
total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single
continuous statement of comprehensive income or in two separate but consecutive statements. The amendment does not change the items that
must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income under
current GAAP. This guidance is effective for the Company’s fiscal year and interim periods beginning July 1, 2012. The Company is
currently evaluating this guidance, but does not expect its adoption to have a material effect on its consolidated financial statements.
3. SHARE-BASED COMPENSATION
The Company maintains several share-based compensation plans which are more fully described below. The following table shows the
total compensation cost charged against income for these plans and the related tax benefits recognized in the income statement:
Fiscal Year Ended
July 2,
2011
July 3,
2010
June 27,
2009
Share-based compensation expense $ 95,830 $ 81,420 $ 67,542
Income tax benefit related to share-based compensation expense 33,377 28,446 23,920
Coach Stock-Based Plans
Coach maintains the 2010 Stock Incentive Plan to award stock options and shares to certain members of Coach management and the
outside members of its Board of Directors (“Board”). Coach maintains the 2000 Stock Incentive Plan, the 2000 Non-Employee Director
Stock Plan and the 2004 Stock Incentive Plan for awards granted prior to the establishment of the 2010 Stock Incentive Plan. These plans
were approved by Coach’s stockholders. The exercise price of each stock option equals 100% of the market price of Coach’s stock on the
date of grant and generally has a maximum term of 10 years. Stock options and share awards
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