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management’s฀discussion฀and฀analysis
management’s฀discussion฀and฀analysis
GOLDMAN฀SAC H S ฀ 2004฀ A N N U A L ฀ R E P ORT ฀ ฀ ฀ 6 7
Recent Accounting Developments
In December 2003, the Financial Accounting Standards
Board (FASB) issued FASB Interpretation (FIN) No. 46-R.
FIN No. 46-R replaced FIN No. 46, which was issued in
January 2003. As permitted, we adopted either FIN No. 46 or
FIN No. 46-R for substantially all VIEs in which we held a
variable interest as of November 2003. As of May 2004, we
adopted FIN No. 46-R for all VIEs in which we held a variable
interest. The effect of our adoption of FIN No. 46 and FIN
No. 46-R was not material to our financial condition, results
of operations or cash flows.
In December 2003, the FASB issued SFAS No. 132 (revised
2003), “Employers’ Disclosures about Pensions and Other
Postretirement Benefits.” SFAS No. 132 (revised 2003) amends
the disclosure requirements for pension plans and other post-
retirement benefits by requiring additional disclosures such as
descriptions of the types of plan assets, investment strategies,
measurement dates, plan obligations, cash flows and compo-
nents of net periodic pension costs recognized during interim
periods. The statement does not change the measurement or
recognition of plan assets and obligations. We adopted the
interim period disclosures beginning with the first quarter of
fiscal 2004. As required, we adopted the annual disclosure
provisions effective for our fiscal year ending November 2004.
See Note 11 to the consolidated financial statements for fur-
ther information regarding our employee benefit plans.
In May 2004, the FASB issued the FASB Staff Position (FSP)
No. FAS 106-2, “Accounting and Disclosure Requirements
Related to the Medicare Prescription Drug, Improvement and
Modernization Act of 2003,” which supersedes FSP No. FAS
106-1 of the same title issued in January 2004. The Medicare
Prescription Drug, Improvement and Modernization Act of
2003 (the Medicare Act) introduces a federal subsidy to spon-
sors of retiree health care benefit plans that provide a benefit
that is at least actuarially equivalent to Medicare Part D.
Management has concluded that, if provisions are finalized in
their current form, benefits provided under our plan meet the
“actuarially equivalent” standard set forth in the Medicare
Act. As permitted, we prospectively adopted FSP No. FAS
106-2 in the fourth quarter of fiscal 2004, thereby reducing
our accumulated benefit obligation by $13 million. The impact
on net periodic postretirement benefit cost in future periods is
not expected to have a material effect on our financial condi-
tion, results of operations or cash flows.
In December 2004, the FASB issued a revision to SFAS
No. 123, “Accounting for Stock-Based Compensation,” SFAS
No. 123-R, “Share-Based Payment.” SFAS No. 123-R focuses
primarily on transactions in which an entity exchanges its
equity instruments for employee services and generally estab-
lishes standards for the accounting for transactions in which
an entity obtains goods or services in share-based payment
transactions. SFAS No. 123-R is effective for our fourth quar-
ter of fiscal 2005. We are currently evaluating the effect of
adoption of SFAS No. 123-R, but do not expect adoption to
have a material effect on our financial condition, results of
operations or cash flows.
BES฀•฀Phone฀(201)฀635-5240฀฀•฀FAX฀(201)฀635-5199
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