Henry Schein 2003 Annual Report Download - page 44

HENRY SCHEIN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In thousands, except share and per share data)
Note 1–Significant Accounting Policies (Continued)
In April 2003, the FASB issued FAS No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities." FAS No.
149 amends FAS No. 133 for decisions made by the FASB’s Derivatives Implementation Group, other FASB projects dealing with financial
instruments, and in response to implementation issues raised in relation to the application of the definition of a derivative. This statement
is generally effective for contracts entered into or modified after June 30, 2003 and for hedging relationships designated after June 30,
2003. The adoption of FAS 149 did not have a material effect on our financial position or results of operations.
In January 2003, the FASB issued Interpretation ("FIN") No. 46, "Consolidation of Variable Interest Entities" and in December 2003, a
revised interpretation was issued (FIN No. 46(R)). In general, a variable interest entity ("VIE") is a corporation, partnership, trust, or any
other legal structure used for business purposes that either does not have equity investors with voting rights or has equity investors that
do not provide sufficient financial resources for the entity to support its activities. FIN 46 requires a VIE to be consolidated by a company
if that company is designated as the primary beneficiary. Application of FIN 46 is required in financial statements of public entities that
have interest in structures that are commonly referred to as special-purpose entities, or SPEs, for periods ending after December 15, 2003.
Application by public entities, other than small business issuers, for all other types of VIEs (i.e. non-SPEs) is required in financial
statements for periods ending after March 15, 2004. The adoption of FIN 46 did not have a material effect on our financial position or
results of operations.
In December 2002, the FASB issued FAS No. 148, "Accounting for Stock-Based Compensation – Transition and Disclosure." This
statement amends FAS No. 123, "Accounting for Stock-Based Compensation," to provide alternative methods of transition for a voluntary
change to the fair value based method of accounting for stock-based employee compensation. In addition, FAS 148 amends the
disclosure requirements of FAS 123 to require prominent disclosures in both annual and interim financial statements about the method of
accounting for stock-based employee compensation and the effect of the method used on reported results. We adopted the disclosure
provisions of this standard.
In November 2002, the FASB reached a consensus regarding EITF Issue No. 00-21, "Revenue Arrangements with Multiple Deliverables."
EITF 00-21 addresses accounting for arrangements that may involve the delivery or performance of multiple products, services, and/or
rights to use assets. The guidance provided by EITF 00-21 is effective for contracts entered into on or after July 1, 2003. The adoption
of EITF 00-21 did not have a material effect on our financial position or results of operations.
In November 2002, the FASB issued FIN No. 45, "Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others". FIN 45 addresses the disclosures to be made by a guarantor in its interim and annual financial
statements about its obligations under certain guarantees. FIN 45 also clarifies that a guarantor is required to recognize, at the inception
of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. The disclosure requirements in this
Interpretation are effective for financial statements of interim or annual periods ending after December 15, 2002. The adoption of FIN 45
did not have a material effect on our financial position or results of operations.
In June 2002, the FASB issued FAS 146, "Accounting for Costs Associated with Exit or Disposal Activities". This Statement addresses
financial accounting and reporting for costs associated with exit or disposal activities and nullifies EITF Issue No. 94-3, "Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring)". The principal difference between this Statement and EITF 94-3 relates to the Statement’s requirements for recognition of
a liability for a cost associated with an exit or disposal activity. This Statement requires that a liability for a cost associated with an exit or
disposal activity be recognized when the liability is incurred, whereas under EITF 94-3, a liability was recognized at the date of an entity’s
commitment to an exit plan. This Statement is effective for exit or disposal activities that are initiated after December 31, 2002. The
adoption of FAS 146 did not have a material effect on our financial position or results of operations.
In June 2001, the FASB issued FAS No. 143, "Accounting for Asset Retirement Obligations," which addresses financial accounting
requirements for retirement obligations associated with tangible long-lived assets. In May 2002, the FASB issued FAS No. 145, "Rescission
of FASB Statements 4, 44, 64, Amendment to FASB Statement No. 13, and Technical Corrections as of April 2002." FAS 145 amends other
existing authoritative pronouncements to make various technical corrections, clarify meanings, or describe their applicability under
changed conditions. FAS 143 and 145 were effective commencing April 1, 2003 and did not have a material effect on our financial position
or results of operations.
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