Comfort Inn 2002 Annual Report Download - page 47

CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
21. Impact of Recently Issued Accounting Standards
In April 2002, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 145, “Rescission of
FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections.” SFAS
No. 145, among other matters, updates and clarifies existing accounting pronouncements related to gains and
losses from the extinguishment of debt and certain lease modifications that have economic effects similar to sale-
leaseback transactions. The provisions of SFAS No. 145 were generally effective as of May 15, 2002. The
adoption of SFAS No. 145 did not have a material impact on our results of operations or financial position.
In June 2002, the FASB issued SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal
Activities.” SFAS No. 146 requires companies to recognize costs associated with exit (including restructuring) or
disposal activities at fair value when the related liability is incurred rather than at the date of a commitment to an
exit or disposal plan under prior practice. Costs covered by the standard include certain contract termination
costs, certain employee termination benefits and other costs to consolidate or close facilities and relocate
employees that are associated with an activity being exited or long-lived assets being disposed. As permitted by
SFAS No. 146, we adopted SFAS No. 146 in 2002.
In November 2002, the FASB issued Interpretation No. 45, “Guarantor’s Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others.” Such Interpretation elaborates
on the disclosures to be made by a guarantor about its obligations under certain guarantees issued. It also clarifies that a
guarantor is required to recognize, at the inception of a guarantee, a liability for the fair value of the obligation
undertaken in issuing the guarantee. The initial recognition and measurement provisions of this Interpretation apply to
guarantees issued or modified after December 31, 2002. We will adopt these provisions on January 1, 2003. The
disclosure provisions of this Interpretation are effective for financial statements with annual periods ending after
December 15, 2002. We have applied the disclosure provisions of this Interpretation as of December 31, 2002, as
required (see Note 19—Commitments and Contingencies to our Consolidated Financial Statements).
In December 2002, the FASB issued SFAS No. 148, “Accounting for Stock-Based Compensation—
Transition and Disclosure.” SFAS No. 148 amends SFAS No. 123, “Accounting for Stock-Based
Compensation,” to provide alternative methods of transition for a voluntary change to the fair value based
method of accounting for stock-based employee compensation. In addition, SFAS No. 148 amends the disclosure
requirements of SFAS No. 123 to require prominent disclosures in both annual and interim financial statements
about the method of accounting for stock-based employee compensation and the effect of the method used on
reported results. The transition and disclosure provisions of SFAS No. 148 are effective for financial statements
for interim and fiscal years ending after December 15, 2002, with early application permitted for entities with a
fiscal year ending prior to December 15, 2002. We have adopted the disclosure provisions of SFAS No. 148
effective December 31, 2002 and the transition provisions effective January 1, 2003.
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