Garmin 2002 Annual Report Download - page 36

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period pro forma disclosures if stock-based compensation is accounted for under the intrinsic value method in any period
presented. The expanded annual disclosure requirements and the transition provisions are effective for the Company’s fiscal year
2002. The new interim period disclosures are required in the Company’s financial statements for interim periods beginning in the
first quarter of fiscal 2003. This statement has not had and is not expected to have a material impact on the Company’s results of
operations or financial condition.
In October 2001, the FASB issued SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” which is
effective for fiscal years beginning after December 15, 2001. This new standard supersedes SFAS No. 121, “Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,” providing one accounting model for the review
of asset impairment. SFAS No. 144 retains much of the recognition and measurement provisions of SFAS No. 121, but removes
goodwill from its scope. It also requires long-lived assets to be disposed of other than by sale to be considered as held and used
until disposed of, requiring the depreciable life to be adjusted as an accounting change. Criteria to classify long-lived assets to be
disposed of by sale has changed from SFAS No. 121, but these costs continue to be reported at the lower of their carrying
amount or fair value less cost to sell, and will cease to be depreciated.
SFAS No. 144 also supersedes the section of the APB Opinion No. 30, which prescribes reporting for the effects of a disposal of a
segment of a business. SFAS No. 144 retains the basic presentation provisions of the opinion, but requires losses on a disposal or
discontinued operation to be recognized as incurred. It also broadens the definition of a discontinued operation to include a
component of an entity. The adoption of this statement has not had and is not expected to have a material impact on our
financial condition or results of operations.
In July 2001, the FASB issued SFAS No. 143, “Accounting for Asset Retirement Obligations.” The objective of this statement is to
provide accounting guidance for legal obligations associated with the retirement of long-lived assets by requiring the fair value
of a liability for the asset retirement obligation to be recognized in the period in which it is incurred. When the liability is
initially recognized, the asset retirement costs should also be capitalized by increasing the carrying amount of the related long-
lived asset. The liability is then accreted to its present value each period and the capitalized costs are depreciated over the useful
life of the associated asset. This statement is effective for fiscal years beginning after June 15, 2002, and is not expected to have
a material impact on our financial statements.
In June 2001, the FASB issued SFAS No. 141, “Business Combinations,” and SFAS No. 142, “Goodwill and Other Intangible Assets.”
SFAS No. 141 supercedes APB Opinion No. 16, “Business Combinations,” and SFAS No. 28, “Accounting for Pre-acquisition
Contingencies of Purchased Enterprises.” This statement requires accounting for all business combinations using the purchase
method, and changes the criteria for recognizing intangible assets apart from goodwill. This statement is effective for all
business combinations initiated after June 30, 2001. SFAS No. 142 supercedes APB Opinion No. 17, “Intangible Assets” and
addresses how purchased intangibles should be accounted for upon acquisition. The statement also addresses how goodwill and
other intangible assets should be accounted for after they have been initially recognized in the financial statements. All
intangibles are subject to periodic impairment testing and are adjusted down to fair value. This statement is effective for fiscal
years beginning after December 15, 2001, and its adoption has not had and is not expected to have a material impact on our
financial condition or results of operations.
In June 1998 and June 1999, the FASB issued SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” and
SFAS No. 137, “Accounting for Derivative Instruments and Hedging Activities--Deferral of the Effective Date of FASB Statement
No. 133”. These statements require companies to record derivatives on the balance sheet as assets or liabilities, measured at fair
value. Gains or losses resulting from changes in the values of those derivatives would be accounted for depending on the use of
the derivative and whether it qualifies for hedge accounting. SFAS No. 133 was effective for our fiscal year ending December 29,
2001. The adoption of SFAS No. 133 has not had a material impact on our financial condition or results of operations.