Equifax 2002 Annual Report Download - page 52

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In April 2002, the FASB issued SFAS No. 145, “Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB Statement
No. 13, and Technical Corrections or SFAS 145.” SFAS 145 amends
SFAS No. 13, “Accounting for Leases,” to eliminate inconsistency
between the required accounting for sale-leaseback transactions
and the required accounting for certain lease modifications that
have economic effects that are similar to sale-leaseback transac-
tions. SFAS 145 also rescinds SFAS 4, “Reporting Gains and Losses
from Extinguishment of Debt.” Accordingly, gains or losses from
extinguishment of debt shall not be reported as extraordinary
items unless the extinguishment qualifies as an extraordinary item
under the criteria APB 30, SFAS 145 is effective for fiscal years
beginning after May 15, 2002. We adopted SFAS 145 on
January 1, 2003.
In June 2002, the FASB issued SFAS No. 146, “Accounting for
Costs Associated with Exit or Disposal Activities,” or SFAS 146.
SFAS 146 provides guidance related to accounting for costs asso-
ciated with disposal activities covered by SFAS 144 or with exit or
restructuring activities previously covered by Emerging Issues Task
Force (“EITF”) Issue No. 94-3, “Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring).” SFAS 146
supersedes EITF Issue No. 94-3 in its entirety. SFAS 146 requires
that costs related to exiting an activity or to a restructuring not be
recognized until the liability is incurred. SFAS 146 will be applied
prospectively to exit or disposal activities that are initiated after
December 31, 2002. We adopted SFAS 146 on January 1, 2003.
In November 2002, the FASB issued FASB Interpretation No. 45,
or FIN 45, “Guarantor’s Accounting and Disclosure Requirements
for Guarantees, Including Indirect Guarantees of Indebtedness of
Others.” FIN 45 currently requires that a liability be recorded in the
guarantor’s balance sheet upon issuance of a guarantee. In addi-
tion, as of December 31, 2002, FIN 45 requires disclosures about
the guarantees that an entity has issued, including a roll-forward
of the entity’s product warranty liabilities. We adopted the dis-
closure requirements of FIN 45 effective December 31, 2002 and
the remaining provisions on January 1, 2003 and have included
the required disclosures in these Notes to our Consolidated
Financial Statements.
In November 2002, the EITF reached a consensus on Issue
No. 00-21, “Revenue Arrangements with Multiple Deliverables.”
EITF Issue No. 00-21 provides guidance on how to account for
arrangements that involve the delivery or performance of multiple
products, services and/or rights to use assets. The provisions of
EITF Issue No. 00-21 will apply to revenue arrangements entered
into in fiscal periods beginning after June 15, 2003 and are not
expected to have a material impact on our financial position or
results of operations.
In December 2002, the FASB issued SFAS No. 148, “Accounting
for Stock-Based Compensation, Transition and Disclosure or
SFAS 148.” SFAS 148 provides alternative methods of transition
for a voluntary change to the fair value-based method of account-
ing for stock-based employee compensation. In addition, SFAS 148
amends the disclosure provisions of SFAS 123, “Accounting for
Stock-Based Compensation” to currently require disclosure in the
summary of significant accounting policies of the effects of an
entity’s accounting policy with respect to stock-based employee
compensation on reported net income and earnings per share in
annual and interim financial statements. SFAS 148 does not amend
SFAS 123 to require companies to account for their employee
stock-based awards using the fair value method. However, the
disclosure provisions are required for all companies with stock-
based employee compensation, regardless of whether they utilize
the fair value method of accounting described in SFAS 123 or the
intrinsic value method described in APB Opinion No. 25, “Accounting
for Stock Issued to Employees.” We adopted SFAS 148 on January 1,
2003 and have included the initial required disclosures in these
Notes to our Consolidated Financial Statements.
In January 2003, the FASB issued FASB Interpretation No. 46
(“FIN 46”), “Consolidation of Variable Interest Entities, an
Interpretation of ARB No. 51.” FIN 46 requires certain variable
interest entities to be consolidated by the primary beneficiary of
the entity if the equity investors in the entity do not have the char-
acteristics of a controlling financial interest or do not have suffi-
cient equity at risk for the entity to finance its activities without
additional subordinated financial support from other parties.
FIN 46 is effective for all new variable interest entities created or
acquired after January 31, 2003. For variable interest entities cre-
ated or acquired prior to February 1, 2003, the provisions of FIN 46
must be applied for the first interim or annual period beginning
after June 15, 2003. We are evaluating the impact of FIN 46 on
our financial position and results of operations.
2.
DISCONTINUED OPERATIONS
During the third quarter of 2002, we made the decision to exit our
commercial services business in Spain, and this business is now
held for sale, with the expectation to sell the business within
twelve months. In accordance with SFAS 144 (Note 1), the net
assets, results of operations and cash flows of the Spain commer-
cial business for 2002 have been classified as “discontinued oper-
ations.” For 2002, revenues for this business totaled $9.1 million
and pre-tax losses (after minority interest and before estimated
loss on disposal) were $6.5 million. The estimated loss on disposal
recorded in the third quarter of 2002 totaled $9.0 million after
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