Mattel 2009 Annual Report Download - page 74

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In June 2009, the FASB issued SFAS No. 167, Amendments to FASB Interpretation No. 46(R). SFAS
No. 167 amends FASB Interpretation No. (“FIN”) 46, Consolidation of Variable Interest Entities (revised
December 2003)—an interpretation of ARB No. 51, which requires an enterprise to determine whether its
variable interest or interests give it a controlling financial interest in a variable interest entity. The primary
beneficiary of a variable interest entity is the enterprise that has both (i) the power to direct the activities of a
variable interest entity that most significantly impact the entity’s economic performance, and (ii) the obligation
to absorb losses of the entity that could potentially be significant to the variable interest entity or the right to
receive benefits from the entity that could potentially be significant to the variable interest entity. SFAS No. 167
also amends FIN 46(R) to require ongoing reassessments of whether an enterprise is the primary beneficiary of a
variable interest entity. SFAS No. 167 is effective for interim and annual reporting periods beginning after
November 15, 2009. Mattel does not expect the adoption of SFAS No. 167 to have a material impact on its
consolidated financial statements.
Note 2—Goodwill and Other Intangibles
The change in the carrying amount of goodwill by reporting unit for 2009 and 2008 is shown below. Brand-
specific goodwill held by foreign subsidiaries is allocated to the US reporting units selling those brands, thereby
causing foreign currency translation impact to the US reporting units.
Mattel
Girls Brands
US Division
Mattel
Boys Brands
US Division
Fisher-
Price
Brands US
American Girl
Brands International Total
(In thousands)
Balance at December 31, 2007 ..... $38,751 $124,469 $217,383 $207,571 $257,475 $845,649
Additions/Adjustments ........... — 7,165 — — 8,105 15,270
Impact of currency exchange rate
changes ..................... (9,527) (751) (1,863) — (32,975) (45,116)
Balance at December 31, 2008 ..... 29,224 130,883 215,520 207,571 232,605 815,803
Impact of currency exchange rate
changes ..................... 2,858 (146) 560 — 9,393 12,665
Balance at December 31, 2009 ..... $32,082 $130,737 $216,080 $207,571 $241,998 $828,468
In 2009, Mattel performed the annually required impairment tests and determined that its goodwill was not
impaired. Mattel has not recorded any goodwill impairment subsequent to its initial adoption of ASC 350-20
(formerly SFAS No. 142, Goodwill and Other Intangible Assets), which was on January 1, 2002.
Identifiable intangibles include the following:
December 31,
2009 2008
(In thousands)
Identifiable intangibles (net of amortization of $69.5 million and $61.8 million in 2009
and 2008, respectively) ................................................... $ 93,546 $107,447
Nonamortizable identifiable intangibles ........................................ 122,223 128,382
$215,769 $235,829
In 2009, Mattel performed the annual impairment test and determined that certain of its nonamortizable
intangible assets was impaired. Mattel also tested its amortizable intangible assets for impairment during 2009.
As a result of these impairment tests, Mattel recorded impairment charges of approximately $10 million, which
are reflected within other selling and administrative expenses. Nonamortizable and amortizable intangible assets
were determined to not be impaired in 2008 and 2007.
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