Earthlink 2008 Annual Report Download - page 277

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 (“SFAS 159”). SFAS 159 gives the Company the irrevocable option to carry most financial assets and
liabilities at fair value, which changes in fair value recognized in earnings. SFAS 159 is effective for the Company’s 2008 fiscal year. The
Company is currently assessing the potential effect of SFAS 159 on its financial statements, and does not believe that the adoption of SFAS 159
will have a material impact on the Company’s financial position, results of operations or cash flows.
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (“SFAS 157”). SFAS 157 provides a common
definition of fair value and establishes a framework to make the measurement of fair value in generally accepted accounting principles more
consistent and comparable. SFAS 157 also requires expanded disclosures to provide information about the extent to which fair value is used to
measure assets and liabilities, the methods and assumptions used to measure fair value, and the effect of fair value measures on earnings.
SFAS 157 is effective for the Company’
s 2008 fiscal year, although early adoption is permitted. The Company does not believe that the adoption
of SFAS 157 will have a material impact on the Company’s financial position, results of operations or cash flows.
In July 2006, the FASB issued FIN No. 48, Accounting for Uncertainty in Income Taxes (“FIN 48”).
FIN 48 clarifies the accounting for
income taxes by prescribing a minimum probability threshold that a tax position must meet before a financial statement benefit is recognized.
The minimum threshold is defined in FIN 48 as a tax position that is more likely than not to be sustained upon examination by the applicable
taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit
to be recognized is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement.
FIN 48 must be applied to all existing tax positions upon initial adoption. The cumulative effect of applying FIN 48 at adoption, if any, is to be
reported as an adjustment to opening retained earnings for the year of adoption. FIN 48 is effective for the Company’s 2007 fiscal year. The
adoption of FIN 48 did not have a material impact on the Company’s financial position, results of operations or cash flows. (See Note 13.)
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