Incredimail 2009 Annual Report Download - page 97

INCREDIMAIL LTD .
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Company repurchases its Ordinary shares from time to time on the open market and holds such shares
as treasury shares. The Company presents the cost to repurchase treasury shares as a reduction of
shareholders' equity.
On July 1, 2009, the FASB issued the FASB Accounting Standards Codification (the “ASC”).
The ASC became
the single source of authoritative nongovernmental U.S. GAAP, superseding existing pronouncements issued
by the FASB, the American Institute of Certified Public Accountants, the Emerging Issues Task Force and
related literature. The ASC eliminates the previous U.S. GAAP hierarchy and establishes one level of
authoritative GAAP. Rules and interpretive releases issued by the SEC under authority of federal securities
law are also sources of the authoritative GAAP for SEC registrants. All other literature is considered non-
authoritative. The Codification is effective for interim and annual periods ending after September 15, 2009.
In April 2009, the FASB issued authoritative guidance on recognition and presentation of other-than-
temporary
impairments. This guidance clarifies the interaction of the factors that should be considered when determining
whether a debt security is other than temporarily impaired; provides guidance on the amount of an other-than-
temporary impairment recognized in earnings and other comprehensive income; and expands the disclosures required
for other-than-
temporary impairments for debt and equity securities. The guidance requires an entity to assess whether
it intends to sell, or it is more likely than not that it will be required to sell a security before recovery of its amortized
cost basis. If either of those criteria is met, the entire difference between amortized cost and fair value is recognized in
earnings. For securities that do not meet these criteria, the amount of impairment recognized in earnings is limited to
the amount related to credit losses, while impairment related to other factors is recognized in other comprehensive
income. The Company adopted this guidance on April 1, 2009, and reclassified the $210 non-
credit related portion of
other than temporary impairment losses recognized in prior period earnings as a cumulative effect adjustment that
increased retained earnings and decreased accumulated other comprehensive income at April 1, 2009.
In May 2009, the FASB issued authoritative guidance on subsequent events, which sets forth the period after
the balance sheet date during which management of a reporting entity should evaluate events or transactions
that may have occurred for potential recognition or disclosure in the financial statements. The guidance also
sets forth the circumstances under which an entity should recognize events or transactions occurring after the
balance sheet date in its financial statements and the disclosures that an entity should make about events or
transactions that occurred after the balance sheet date. The Company adopted this guidance in these financial
statements.
In March 2008, the FASB issued amended guidance on disclosures about derivative instruments and hedging
activities. This guidance applies to all derivative instruments and non-derivative instruments that are
designated and qualify as hedging instruments and related hedged items. This guidance requires entities to
provide greater transparency through additional disclosures about how and why an entity uses derivative
instruments, how derivative instruments and related hedged items are accounted for, and how derivative
instruments and related hedged items affect an entity’s financial position, results of operations and cash flows.
The adoption of this guidance did not impact the Company’s consolidated financial results as it requires
additional disclosure, rather than a change in accounting. See Note 12.
NOTE 2:
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SIGNIFICANT ACCOUNTING POLICIES (Cont.)
v.
Treasury shares:
w.
Adoption of New Accounting Standards:
F-16