CompUSA 2011 Annual Report Download - page 24

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Recently Adopted and Newly Issued Accounting Pronouncements
Public companies in the United States are subject to the accounting and reporting requirements of various authorities, including the Financial
Accounting Standards Board (“FASB”) and the Securities and Exchange Commission (“SEC”). These authorities issue numerous pronouncements,
most of which are not applicable to the Company’s current or reasonably foreseeable operating structure. Below are the new authoritative
pronouncements that management believes are relevant to the Company’s current operations.
In 2011, the FASB issued guidance which provides companies with the option to perform a qualitative assessment to determine whether it is more
likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing updated qualitative factors, a company
determines it is more likely than not that the fair value of a reporting unit is less than its carrying amount, it would not have to perform the current two-
step goodwill impairment test. The Company adopted this guidance in October 2011. The adoption of this guidance did not have a material impact on
the consolidated financial statements.
In June 2011, the FASB issued amended guidance related to comprehensive income. The amended guidance requires the presentation of items of net
income, items of other comprehensive income and total comprehensive income in one continuous statement or in two separate but consecutive
statements. Presentation of other comprehensive income as part of the statement of stockholders’ equity is no longer allowed under the amended
guidance. The amended guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The
Company does not expect this guidance to have a material impact on its consolidated financial statements.
In December 2010, the FASB issued authoritative guidance that updates existing disclosure requirements related to supplementary pro forma
information for business combinations. Under the updated guidance, a public entity that presents comparative financial statements should disclose
revenue and earnings of the combined entity as though the business combination that occurred during the current year had occurred as of the beginning
of the comparable prior annual reporting period only. The guidance also expands the supplemental pro forma
disclosures to include a description of the
nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma
revenue and earnings. This guidance became effective for the Company on January 1, 2011 and will be applied prospectively to business combinations
that have an acquisition date on or after January 1, 2011.
Highlights from 2011
The discussion of our results of operations and financial condition that follows will provide information that will assist in understanding our financial
statements and information about how certain accounting principles and estimates affect the consolidated financial statements. This discussion should
be read in conjunction with the consolidated financial statements included herein.
Table of Contents
•
Sales grew 2.6%, 1% on a constant currency basis, to $3.7 billion in 2011 over 2010.
•
One new retail store opened.
• Movements in exchange rates positively impacted European sales by approximately $45.6 million and Canadian sales by approximately $9.0
million.
•
Gross margin benefited from changes in the segment mix, reflecting increased sales of industrial products.
•
Special gains, net of investigative and legal costs, of $5.6 million pre tax, approximately $0.10 per diluted share, after tax, for settlement
proceeds received from a former officer and director.
•
Diluted earnings per share increased to $1.47 from $1.13 in 2010.
22