Estee Lauder 2008 Annual Report Download - page 86

84 THE EST{E LAUDER COMPANIES INC.
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. The
Company is currently evaluating the disclosure require-
ments of SFAS No. 161. As this is a disclosure-only
standard, the Company does not anticipate an impact on
the consolidated fi nancial statements as a result of its
adoption. SFAS No. 161 becomes effective for the March
2009 interim consolidated 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 the
Company’s fi scal 2010. The guidance for determining use-
ful lives must be applied prospectively to intangible assets
acquired after the effective date. The disclosure require-
ments must be applied prospectively to all intangible
assets recognized 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 fi s-
cal years beginning after December 15, 2008, and interim
periods within those years. Upon adoption, a company is
required to retrospectively adjust its earnings per share
data (including any amounts related to interim periods,
summaries of earnings and selected fi nancial data) to con-
form with the provisions in this FSP. Early application of
this FSP is prohibited. The Company does not issue share-
based payment awards that contain nonforfeitable rights
to dividends or dividend equivalents.
fair values, with limited exceptions; 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 prospectively to business combi-
nations 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
noncontrolling 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
the Company’s fi scal 2010, except for the presentation
and disclosure requirements, which will be applied retro-
spectively for all periods presented.
In December 2007, the FASB ratifi ed the consensus
reached on EITF Issue No. 07-1, “Collaborative Arrange-
ments,” (“EITF No. 07-1”). This EITF addresses accounting
for collaborative arrangement activities that are con-
ducted 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 pur-
suant to the guidance in EITF 99-19, “Reporting Revenue
Gross as a Principal versus Net as an Agent,” and other
applicable accounting literature. Payments to or from col-
laborators 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 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 the Company’s fi scal 2010
using a modifi ed version of retrospective application.
The Company is currently evaluating the impact the
provisions of EITF No. 07-1 will have on its consolidated
fi nancial statements.
In March 2008, the FASB issued SFAS No. 161,
“Disclosures about Derivative Instruments and Hedging