Jamba Juice 2008 Annual Report Download - page 130

Table of Contents
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 

Pre-opening costs include certain costs incurred to establish a new store location and costs incurred in connection with the start-up of its operations.
The Company records pre-opening expenses in accordance with Statement of Position 98-5, Reporting on the Costs of Start-Up Activities, which
requires costs of start-up activities and organization costs to be expensed as incurred.
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All marketing and promotion costs are expensed as incurred. Marketing and promotion costs amounted to $307,155 as of December 13, 2005.
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Income or loss for tax reporting purposes is the responsibility of the individual members and, accordingly, no provision or benefit for income taxes is
recorded by the Company.
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In 1997, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standard (SFAS) No. 131, Disclosures about
Segments of an Enterprise and Related Information . 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.
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In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity .
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, Consolidation of Variable Interest Entities, 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.
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