Equifax 2007 Annual Report Download - page 63

EQUIFAX | 2007 ANNUAL REPORT 61
Other Assets. Other assets on our Consolidated Balance Sheets
primarily represents the cash surrender value of life insurance
policies covering certain offi cers of the Company, employee benefi t
trust assets, a statutorily-required tax deposit and data purchases,
net of related amortization.
Foreign Currency Translation. The functional currency of each
of our foreign subsidiaries is that subsidiary’s local currency. We
translate the assets and liabilities of foreign subsidiaries at the
year-end rate of exchange and revenue and expenses at the monthly
average rates during the year. We record the resulting translation
adjustment in other comprehensive income, a component of
shareholders’ equity. We also record gains and losses resulting from
the translation of intercompany balances of a long-term investment
nature in accumulated other comprehensive loss.
Financial Instruments. Our fi nancial instruments consist primarily
of cash and cash equivalents, accounts and notes receivable, accounts
payable and short-term and long-term debt. The carrying amounts
of these items, other than long-term debt, approximate their fair
market values due to the short-term nature of these instruments.
As of December 31, 2007 and 2006, the fair value of our fi xed-rate
debt (determined internally through the use of related public
fi nancial information) was $776.0 million and $414.2 million,
respectively, compared to its carrying value of $790.6 million and
$398.8 million, respectively.
Recent Accounting Pronouncements. In November 2005, Financial
Accounting Standards Board Staff Position FAS No. 123(R)-3:
“Transition Election Related to Accounting for the Tax Effects of
Share-Based Payment Awards,” or FSP 123R-3, was issued, which
provides a practical or simplifi ed transition election related to
accounting for the tax effects of share-based payment awards
to employees as opposed to the more detailed method provided
in SFAS 123R. FSP 123R-3 allowed us to elect a transition method
up to one year from the date of adoption of SFAS 123R. Accordingly,
on January 1, 2007, we elected the simplifi ed method as described
in FSP 123R-3. As a result of electing this transition method, we
are required to retrospectively apply this method to our 2006
Consolidated Statement of Cash Flows since we were required to
apply the more detailed method in SFAS 123R until we elected a
transition method. The reclassifi cation between cash provided by
operating activities and cash provided by fi nancing activities on
our 2006 Consolidated Statement of Cash Flows as a result of
electing the simplifi ed method is not material.
In September 2006, the FASB issued SFAS No. 157, “Fair Value
Measurements,” or SFAS 157, which provides guidance for mea-
suring the fair value of assets and liabilities, as well as requires
expanded disclosures about fair value measurements. SFAS 157
indicates that fair value should be determined based on the assump-
tions marketplace participants would use in pricing the asset or
liability, and provides additional guidelines to consider in determin-
ing the market-based measurement. We will be required to adopt
SFAS 157 on January 1, 2008. In February 2008, the FASB issued
FSP 157-2 “Partial Deferral of the Effective Date of Statement 157,”
or FSP 157-2. FSP 157-2 delays the effective date of SFAS 157
for all nonfi nancial assets and nonfi nancial liabilities, except those
that are recognized or disclosed at fair value in our Consolidated
Financial Statements on a recurring basis (at least annually), to
January 1, 2009. We are currently assessing the impact that these
pronouncements have on our consolidated fi nancial statements.
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,” or
SFAS 159, which permits an entity to choose to measure many
fi nancial instruments and certain other items at fair value that are
not currently required to be measured at fair value. We adopted
SFAS 159 on January 1, 2008 and have elected not to apply the
fair value option to any of our fi nancial instruments.
In September 2006, the FASB ratifi ed the consensus reached
by the Emerging Issues Task Force, or EITF, related to EITF Issue
No. 06-04, “Accounting for Deferred Compensation and
Postretirement Benefi t Aspects of Endorsement Split-Dollar Life
Insurance Arrangements,” or EITF 06-04, which requires the
recognition of a liability related to postretirement benefi ts covered
by endorsement split-dollar life insurance arrangements since the
employer has the obligation to provide the benefi t to the employee.
In March 2007, the FASB ratifi ed the consensus reached by the
EITF related to EITF Issue No. 06-10, “Accounting for Deferred
Compensation and Postretirement Benefi t Aspects of Collateral
Assignment Split-Dollar Life Insurance Arrangements,” or
EITF 06-10, which requires (1) the recognition of a liability
related to postretirement benefi ts covered by collateral split-dollar
life insurance arrangements since the employer has the obligation
to provide the benefi t to the employee and (2) to recognize and
measure the asset based on the nature and substance of the arrange-
ment. We have both endorsement and collateral assignment
split-dollar life insurance arrangements for certain offi cers of the
Company. The liability is required to be recognized in accordance
with SFAS No. 106, “Employers’ Accounting for Postretirement
Benefi ts, Other Than Pensions,” or Accounting Principles Board, or
APB, Opinion No. 12, “Omnibus Opinion – 1967,” as appropriate.
For transition purposes, we may adopt EITF 06-04 and EITF 06-10
as changes in accounting principles through either (1) retrospective
application to all periods presented or (2) a cumulative effect
adjustment to retained earnings. We will be required to adopt
EITF 06-04 and EITF 06-10 on January 1, 2008. We do not expect
the adoption of these standards to have a material impact on our
fi nancial statements.
In December 2007, the FASB issued SFAS No. 141(R),
“Business Combinations – a replacement of FASB Statement
No. 141,” or SFAS 141R, which signifi cantly changes the principles
and requirements for how the acquirer of a business recognizes and
measures in its fi nancial statements the identifi able assets acquired,
the liabilities assumed, and any noncontrolling interest in the
acquiree. The statement also provides guidance for recognizing and
measuring the goodwill acquired in the business combination
and determines what information to disclose to enable users of