Harman Kardon 2008 Annual Report Download - page 69

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51
Fair Value Measurements for Purposes of Lease Classification or Measurement under Statement 13, and
FASB Staff Position No. 157-2, Effective Date of FASB Statement No. 157. Collectively, the Staff
Positions defer the effective date of SFAS 157 to fiscal years beginning after November 15, 2008 for
nonfinancial assets and liabilities, and amend the scope of SFAS 157. SFAS 157 is effective for us
beginning in the first quarter of fiscal 2009. We do not expect the adoption of SFAS 157 to have a
material impact on our financial statements.
In February 2007, FASB issued Statement No.159, The Fair Value Option for Financial Assets and
Financial Liabilities, including an amendment of FASB Statement No. 115 (“SFAS 159”), which allows
an entity the irrevocable option to elect fair value for the initial and subsequent measurement for certain
financial assets and liabilities on an instrument-by-instrument basis. Subsequent measurements for the
financial assets and liabilities an entity elects to record at fair value will be recognized in earnings. SFAS
159 is effective for fiscal years beginning after November 15, 2007. SFAS 159 is effective for us
beginning in the first quarter of fiscal 2009. We do not intend to elect fair value measurement for
financial assets and liabilities, and therefore do not believe the adoption of SFAS 159 will have a material
impact on our financial statements.
In December 2007, FASB issued Statement No. 141R, Business Combinations (“SFAS 141R”) which
requires the recognition of assets acquired, liabilities assumed, an any noncontrolling interests at the
acquisition date fair value with limited exceptions. SFAS 141R will change the accounting treatment for
certain specific items and include a substantial number of new disclosure requirements. Such significant
changes include, but are not limited to the “acquirer” recording 100% of all assets and liabilities,
including goodwill, of the acquired business, generally at their fair values, and acquisition-related
transaction and restructuring costs will be expenses rather than treated as part of the cost of the
acquisition and included in the amount recorded for assets acquired. SFAS 141R applies prospectively to
business combinations for which the acquisition date is on or after the first annual reporting period
beginning on or after December 15, 2008. SFAS 141R will apply to any acquisitions consummated by us
on or after July 1, 2009, which is the first day of our fiscal 2010. We are currently evaluating the
expected impact of the adoption of SFAS 141R on future acquisitions.
In March 2008, FASB issued Statement No. 161, Disclosures about Derivative Instruments and Hedging
Activities—an amendment of FASB Statement No. 133 (“SFAS 161”) which requires expanded
disclosures about a company’s derivative instruments including how and why a company uses derivative
instruments, how derivative instruments and related hedged items are accounted for under SFAS 133, and
how derivative instruments and related hedged items affect a company’s financial position, financial
performance and cash flows. The required disclosures also include the location and fair value of
derivative instruments and their gains or losses in tabular format, information about credit-risk-related
contingent features in derivative agreements, counterparty credit risk, and the company’s strategies and
objectives for using derivative instruments. SFAS 161 is effective prospectively for fiscal years and
interim periods beginning on or after November 15, 2008 with early adoption permitted. SFAS 161 is
effective for us beginning in the first quarter of fiscal 2010. We are currently evaluating the impact of
SFAS 161 on our consolidated financial statements.
In May 2008, the FASB issued FSP APB 14-1, Accounting for Convertible Debt Instruments That May
Be Settled in Cash upon Conversion (Including Partial Cash Settlement) (“FSP APB 14-1”). FSP APB