Equifax 2003 Annual Report Download - page 49

NOTES TO CONSOLIDATED FINANCIAL STATEM ENTS
46 EQUIFAX. INFORMATION THAT EMPOWERS.
In December 2002, the FASB issued SFAS No. 148, “Accounting for
Stock-Based Compensation, Transition and Disclosure.” SFAS 148
provides alternative methods of transition for a voluntary change to
the fair value based method of accounting for stock-based employee
compensation. In addition, SFAS 148 amends the disclosure pro-
visions 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 compa-
nies to account for their employee stock-based awards using the
fair value method; however, it does require adoption of the dis-
closure provisions 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 continue to use the intrinsic value
approach. We adopted SFAS 148 on January 1, 2003 and have
included the required disclosures in our “Notes to Consolidated
Financial Statements.”
In April 2003, the FASB issued SFAS No. 149, “Amendment of
Statement 133 on Derivative Instruments and Hedging Activities.”
SFAS 149 requires that contracts with comparable characteristics
be accounted for similarly. In particular, SFAS clarifies under what
circumstances a contract with an initial net investment meets the
characteristic of a derivative, clarifies when a derivative contains
a financing component, and amends the meaning of the term “ an
underlying” to conform it to language used in FASB Interpretation
No. 45, “Guarantor Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of
Others.” SFAS 149 is effective, on a prospective basis, for contracts
entered into or modified after June 30, 2003, and for hedging
relationships designated after June 30, 2003. We have adopted
SFAS 149 and it has not had a material impact on our financial
position or results of operations.
In M ay 2003, the FASB issued SFAS No. 150, “Accounting for
Certain Instruments with Characteristics of both Liabilities and
Equity.” SFAS 150 establishes standards for how an issuer classi-
fies and measures certain financial instruments with the character-
istics of liabilities and equity. It requires that an issuer classify a
financial instrument that is within the scope of SFAS 150 as a
liability, or in some cases, as an asset. In the past, many of these
types of instruments were classified as equity. SFAS 150 is effec-
tive for financial instruments entered into or modified after May 31,
2003, and is otherwise effective at the beginning of the first interim
period after June 15, 2003. It is to be implemented by reporting the
cumulative effect of the change in the accounting principles applied
to financial instruments created before May 2003 and still existing
at the beginning of the interim period in which SFAS 150 is adopted.
Restatement is not permitted. We have adopted SFAS 150 and the
application of its provisions has not had a material impact on our
financial position or results of operations.
In December 2003, the FASB issued a revision to SFAS No. 132,
“Employers’ Disclosures about Pensions and Other Postretirement
Benefits.” The purpose of the revision is to require additional dis-
closures about the assets, obligations, cash flows, and net periodic
benefit cost of defined benefit pension plans and other defined benefit
postretirement plans. These additional disclosures include informa-
tion describing the types of plan assets, investment strategy, meas-
urements date(s), plan obligations, cash flows, and components of net
periodic benefit cost recognized during interim periods. As revised,
SFAS 132 now enhances disclosures of relevant accounting informa-
tion by providing more information about the plan assets available
to finance benefit payments, the obligation to pay benefits, and an
entity’s obligation to fund the plan. This revised version of SFAS 132
is effective for fiscal years ending after December 15, 2003. We have
adopted the revisions to SFAS 132 and have included the revised dis-
closures in our “Notes to Consolidated Financial Statements.”
In December 2003, the FASB issued its revision to FASB Inter-
pretation No. 46, “Consolidation of Variable Interest Entities, an
Interpretation of ARB No. 51,” or FIN 46. FIN 46 addresses the
consolidation by a reporting entity of variable interest entities with
certain characteristics. This Interpretation was effective in January
2003 for variable interest entities created after January 31, 2003 and
in the first fiscal year or interim period beginning after June 15, 2003.
The FASB has issued FASB Staff Positions (“FSP’s”), which have
deferred the effective date for applying the provisions of Interpreta-
tion No. 46 for interests in certain variable interest entities or poten-
tial variable interest entities created before February 1, 2003 until
the end of the first interim period ending after March 15, 2004. These
FSP’s also require certain disclosures about variable interest entities
and potential variable interest entities. We are still assessing the
impact of FIN 46 on arrangements that we have with certain entities
and are still in the process of identifying our potential variable
interest entities. Therefore, we are deferring the application of the
provisions of FIN 46 until the first quarter of fiscal year 2004.
On December 17, 2003, the Staff of the Securities and Exchange
Commission, or SEC, issued Staff Accounting Bulletin No. 104, or
SAB 104, “Revenue Recognition,” which supersedes SAB 101,
“Revenue Recognition in Financial Statements.” SAB 104’s primary
purpose is to rescind the accounting guidance contained in SAB 101
related to multiple-element revenue arrangements that was super-
seded as a result of the issuance of EITF 00-21, “Accounting for
Revenue Arrangements with M ultiple Deliverables.” Additionally,