Jamba Juice 2007 Annual Report Download - page 141

Table of Contents
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NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Segment Reporting
In 1997, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standard (SFAS) No. 131, 
 . The method of determining what information to report is based on the way that management organizes
the operating segments within the Company for making operational decisions and assessments of financial performance. The Company operates under one
reportable retail segment. Accordingly, segment information is not applicable.
Recent Accounting Pronouncements
In May 2003, the FASB issued SFAS No. 150,  .
SFAS No. 150 clarifies the accounting for certain financial instruments with characteristics of both liabilities and equity and requires that those instruments
be classified as liabilities in statements of financial position. Previously, many of those financial instruments were classified as equity. SFAS No. 150 is
effective for financial instruments entered into or modified after May 31, 2003 and otherwise is effective at the beginning of the fiscal year 2004. The
Company’s adoption of SFAS No. 150 did not have an impact on its financial statements.
The Company adopted FASB Interpretation No. 46 and 46R, , effective December 29, 2002. Interpretation
46, as revised in December 2003, changes the accounting model for consolidation from one based on control through voting interests to one based on control
through economic interests. Whether to consolidate an entity now also considers whether that entity has sufficient equity at risk to enable it to operate without
additional subordinated financial support, whether the equity owners in that entity lack the obligation to absorb expected losses or the right to receive residual
returns of the entity, or whether voting rights in the entity are not proportional to the equity interest and substantially all the entity’s activities are conducted for
an investor with few voting rights. This interpretation requires a Company to consolidate variable interest entities (VIE’s) if the enterprise is a primary
beneficiary of the VIE and the VIE possesses specific characteristics. It also requires additional disclosures for parties involved with VIE’s. The adoption of
this statement did not have a material impact on the Company’s results of operations or financial position because the Company does not invest or participate
in any entities, which would be considered VIE’s under Interpretation 46.
In December 2004, the FASB issued SFAS No.151, , which clarifies the accounting for freight, handling costs, and wasted material
(spoilage). Under this Statement, such items will be recognized as current-period charges. In addition, the Statement requires that allocation of fixed production
overheads to the costs of conversion be based on the normal capacity of the production facilities. This Statement will be effective for the Company for
inventory costs incurred on or after January 1, 2006. The Company does not expect the adoption of this Statement to have a significant effect on the
Company’s financial statements.
NOTE 3. INVENTORIES
Inventories consisted of the following:


Store restaurant $103,510
Store retail 10,617
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