Estee Lauder 2009 Annual Report Download - page 128

THE EST{E LAUDER COMPANIES INC. 127
potentially be signifi cant to the variable interest entity or
the right to receive benefi ts from the entity that could
potentially be signifi cant to the variable interest entity.
SFAS No. 167 becomes effective for the Company’s fi scal
2011 year-end and interim reporting periods thereafter.
The Company does not expect SFAS No. 167 to have a
material impact on its consolidated fi nancial statements.
In April 2009, the FASB issued FSP No. FAS 107-1 and
APB 28-1, “Interim Disclosures about Fair Value of Finan-
cial Instruments,” principally to require publicly traded
companies to provide disclosures about fair value of fi nan-
cial instruments in interim fi nancial information. The adop-
tion of this disclosure-only guidance will not have an
impact on the Company’s consolidated fi nancial results
and is effective beginning with its fi scal 2010 interim
period ending September 30, 2009.
In April 2009, the FASB issued FSP No. FAS 141(R)-1,
“Accounting for Assets Acquired and Liabilities Assumed
in a Business Combination That Arise from Contingen-
cies,” to require that assets acquired and liabilities
assumed in a business combination that arise from contin-
gencies be recognized at fair value if fair value can be
reasonably determined. If the fair value of such assets or
liabilities cannot be reasonably determined, then they
would generally be recognized in accordance with SFAS
No. 5, “Accounting for Contingencies” and FASB Interpre-
tation No. 14, “Reasonable Estimation of the Amount of a
Loss—an interpretation of FASB Statement No. 5.” This FSP
also amends the subsequent accounting for assets and
liabilities arising from contingencies in a business combi-
nation and certain other disclosure requirements. This FSP
is effective for assets or liabilities arising from contingen-
cies in business combinations that are consummated
during the Company’s fi scal 2010.
In December 2008, the FASB issued FSP No. FAS
132(R)-1, “Employers’ Disclosures about Postretirement
Benefi t Plan Assets” (“FSP No. FAS 132(R)-1”) to require
employers to provide additional disclosures about plan
assets of a defi ned benefi t pension or other post-retire-
ment plan. These disclosures should principally include
information detailing investment policies and strategies,
the major categories of plan assets, the inputs and valua-
tion techniques used to measure the fair value of plan
assets and an understanding of signifi cant concentrations
of risk within plan assets. While earlier application of the
provisions of this FSP is permitted, the disclosures required
by this FSP shall be provided for fi scal years ending after
December 15, 2009 (or the Company’s fi scal 2010, the
anticipated period of adoption). Upon initial application,
the provisions of this FSP are not required for earlier
periods that are presented for comparative purposes.
Additional enhanced disclosures are also required in
accordance with this FSP. FSP No. FAS 157-4 must be
applied prospectively and is effective for interim and
annual periods ending after June 15, 2009. The adoption
of this standard did not have an impact on the Company’s
consolidated fi nancial statements as its fi nancial assets are
currently valued in active markets.
In February 2007, the FASB issued SFAS No. 159,
“The Fair Value Option for Financial Assets and Financial
Liabilities” (“SFAS No. 159”), to permit all entities to
choose to elect, at specifi ed election dates, to measure
eligible fi nancial instruments at fair value. An entity shall
report unrealized gains and losses on items for which the
fair value option has been elected in earnings at each sub-
sequent reporting date, and recognize upfront costs and
fees related to those items in earnings as incurred and not
deferred. SFAS No. 159 became effective for the Company
as of July 1, 2008. As the Company did not elect the fair
value option for its fi nancial instruments, the adoption of
this standard did not have an impact on its consolidated
fi nancial statements.
Recently Issued Accounting Standards
In June 2009, the FASB issued SFAS No. 168, “The FASB
Accounting Standards Codifi cation™ and the Hierarchy
of Generally Accepted Accounting Principles” (“SFAS No.
168”). SFAS No. 168 establishes the FASB Accounting
Standards Codifi cation™ (the “Codifi cation”) as the single
source of authoritative U.S. generally accepted account-
ing principles (“U.S. GAAP”) recognized by the FASB to
be applied by nongovernmental entities. Rules and inter-
pretive releases of the United States Securities and
Exchange Commission (“SEC”) under authority of federal
securities laws are also sources of authoritative U.S. GAAP
for SEC registrants. SFAS No. 168 and the Codifi cation
become effective for the Company’s September 30, 2009
interim consolidated fi nancial statements. The Company
does not expect SFAS No. 168 or the Codifi cation to have
a material impact on its consolidated fi nancial statements.
In June 2009, the FASB issued SFAS No. 167, “Amend-
ments to FASB Interpretation No. 46(R)” (“SFAS No. 167”).
SFAS No. 167 eliminates the exception to consolidate a
qualifying special-purpose entity, changes the approach
to determining the primary benefi ciary of a variable inter-
est entity and requires companies to more frequently re-
assess whether they must consolidate variable interest
entities. Under the new guidance, the primary benefi ciary
of a variable interest entity is identifi ed qualitatively as the
enterprise that has both (a) the power to direct the activi-
ties of a variable interest entity that most signifi cantly
impact the entity’s economic performance, and (b) the
obligation to absorb losses of the entity that could