Estee Lauder 2008 Annual Report Download - page 75

THE EST{E LAUDER COMPANIES INC. 73
accounting literature. Other detailed information related
to the collaborative arrangement is also required to be
disclosed. The requirements under this EITF must be
applied to collaborative arrangements in existence at the
beginning of our fi scal 2010 using a modifi ed version of
retrospective application. We are currently evaluating the
impact the provisions of EITF No. 07-1 will have on our
consolidated fi nancial statements.
In March 2008, the FASB issued SFAS No. 161,
“Disclosures about Derivative Instruments and Hedging
Activities—an amendment of FASB Statement No. 133”
(“SFAS No. 161”). SFAS No. 161 requires companies to
provide qualitative disclosures about their objectives and
strategies for using derivative instruments, quantitative
disclosures of the fair values and gains and losses of these
derivative instruments in a tabular format, as well as more
information about liquidity by requiring disclosure of a
derivative contract’s credit-risk-related contingent fea-
tures. SFAS No. 161 also requires cross-referencing within
footnotes to enable fi nancial statement users to locate
important information about derivative instruments. We
are currently evaluating the disclosure requirements of
SFAS No. 161. As this is a disclosure-only standard, we do
not anticipate an impact on our consolidated fi nancial
statements as a result of its adoption. SFAS No. 161
becomes effective for our March 2009 interim consoli-
dated fi nancial statements.
In April 2008, the FASB issued FSP No. FAS 142-3,
“Determination of the Useful Life of Intangible Assets.”
This FSP amends the factors that should be considered in
developing renewal or extension assumptions used to
determine the useful life of a recognized intangible asset
under SFAS No. 142, “Goodwill and Other Intangible
Assets” (“SFAS No. 142”). This FSP also adds certain dis-
closures to those already prescribed in SFAS No. 142. FSP
No. FAS 142-3 becomes effective for fi scal years, and
interim periods within those fi scal years, beginning in our
fi scal 2010. The guidance for determining useful lives must
be applied prospectively to intangible assets acquired
after the effective date. The disclosure requirements must
be applied prospectively to all intangible assets recog-
nized as of the effective date.
In June 2008, the FASB issued FSP No. EITF 03-6-1,
“Determining Whether Instruments Granted in Share-
Based Payment Transactions Are Participating Securities.”
This FSP provides that unvested share-based payment
awards that contain nonforfeitable rights to dividends or
dividend equivalents (whether paid or unpaid) are partici-
pating securities and shall be included in the computation
of earnings per share pursuant to the two-class method.
This FSP is effective for fi nancial statements issued for
combinations and for an acquirer to be identifi ed for each
business combination. SFAS No. 141(R) defines the
acquirer as the entity that obtains control of one or more
businesses in the business combination and establishes
the acquisition date as the date that the acquirer achieves
control. Among other requirements, SFAS No. 141(R)
requires the acquiring entity in a business combination to
recognize the identifiable assets acquired, liabilities
assumed and any noncontrolling interest in the acquiree
at their acquisition-date fair values, with limited excep-
tions; acquisition-related costs generally will be expensed
as incurred. SFAS No. 141(R) requires certain fi nancial
statement disclosures to enable users to evaluate and
understand the nature and fi nancial effects of the business
combination. SFAS No. 141(R) must be applied prospec-
tively to business combinations that are consummated on
or after July 1, 2009.
In December 2007, the FASB issued SFAS No. 160,
“Noncontrolling Interests in Consolidated Financial State-
ments, an Amendment of ARB No. 51” (“SFAS No. 160”)
to establish accounting and reporting standards for the
noncontrolling interest in a subsidiary and for the decon-
solidation of a subsidiary. Among other requirements,
SFAS No. 160 clarifi es that a noncontrolling interest in a
subsidiary, which is sometimes referred to as minority
interest, is to be reported as a separate component of
equity in the consolidated fi nancial statements. SFAS No.
160 also requires consolidated net income to include the
amounts attributable to both the parent and the noncon-
trolling interest and to disclose those amounts on the face
of the consolidated statement of income. SFAS No. 160
must be applied prospectively for fi scal years, and interim
periods within those fi scal years, beginning in our fi scal
2010, except for the presentation and disclosure
requirements, which will be applied retrospectively for all
periods presented.
In December 2007, the FASB ratifi ed the consensus
reached on Emerging Issues Task Force (“EITF”) Issue No.
07-1, “Collaborative Arrangements,” (“EITF No. 07-1”).
This EITF addresses accounting for collaborative arrange-
ment activities that are conducted without the creation of
a separate legal entity for the arrangement. Revenues and
costs incurred with third parties in connection with the
collaborative arrangement should be presented gross or
net by the collaborators pursuant to the guidance in EITF
99-19, “Reporting Revenue Gross as a Principal versus
Net as an Agent,” and other applicable accounting litera-
ture. Payments to or from collaborators should be
presented in the income statement based on the nature of
the arrangement, the nature of the company’s business
and whether the payments are within the scope of other