Ingram Micro 2011 Annual Report Download - page 64

INGRAM MICRO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In 000s, except per share data)
Accounting for Stock-Based Compensation
We use the Black-Scholes option-pricing model to determine the fair value of stock options and the closing
market price of our common stock on the date of the grant to determine the fair value of our restricted stock and
restricted stock units. Stock-based compensation expense is recorded for all stock options, restricted stock and
restricted stock units that are ultimately expected to vest as the requisite service is rendered. We recognize these
compensation costs, net of an estimated forfeiture rate, on a straight-line basis over the requisite service period of
the award, which is the vesting term of outstanding stock-based awards. We estimate the forfeiture rate based on
our historical experience during the preceding five fiscal years.
New Accounting Standards
In December 2011, the Financial Accounting Standards Board (“FASB”) issued a new accounting standard
related to enhanced disclosures on offsetting (netting) of assets and liabilities in the financial statements. This
standard requires improved information about financial instruments and derivative instruments that are either
allowed to be offset in accordance with another accounting standard or subject to an enforceable master netting
arrangement or similar agreement, irrespective of whether they are offset in accordance with another accounting
standard. Under this standard, financial statements should disclose the gross amounts of those recognized assets
and liabilities and the amounts offset, whether permitted by another accounting standard or subject to master
netting arrangement, to determine the net amounts presented in the statement of financial position. This standard
is effective for us beginning December 30, 2012 (the first day of fiscal 2013) and must be applied retrospectively
for all comparative periods presented. We are currently in the process of assessing what impact this standard may
have on our consolidated financial position or cash flows.
In June 2011, the FASB issued a new accounting standard related to presentation of comprehensive income.
This standard requires presentation of comprehensive income in either a single statement of comprehensive
income or two separate but consecutive statements. The standard, however, does not change the definitions of the
components of net income and other comprehensive income, when an item must be reclassified from other
comprehensive income to net income, or earnings per share, which is still calculated using net income. The
standard is effective for us beginning in 2012 and must be applied retrospectively. The standard further defines
the approach for reporting tax impacts of comprehensive income and disclosure of amounts reclassified from
comprehensive income to net income; however, the FASB has deferred the effective date for these provisions
until the FASB is able to reconsider such amendments.
In October 2009, the FASB issued a new accounting standard related to revenue recognition in multiple-
deliverable revenue arrangements and certain arrangements that include software elements. This standard
eliminates the residual method of revenue allocation by requiring entities to allocate revenue in an arrangement
using estimated selling prices of the delivered goods and services based on selling price hierarchy. The FASB
also issued a new accounting standard in October 2009, which changes revenue recognition for tangible products
containing software and hardware elements. Under this standard, tangible products containing software and
hardware that function together to deliver the tangible products’ essential functionality are scoped out of the
existing software revenue recognition guidance and will be accounted for under the multiple-element
arrangements revenue recognition guidance discussed above. Both standards were effective for us beginning
January 2, 2011 (the first day of fiscal 2011). The adoption of these standards did not have a material impact on
our consolidated financial position and results of operations.
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