Office Depot 2011 Annual Report Download - page 240

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ew accounting pronouncements under U.S. GAAP -
(a) In June 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update
(“ASU”) No. 2011-05, Presentation of Comprehensive Income, which updated the guidance in Accounting
Standards Codification (“ASC”) Topic 220, Comprehensive Income. Under the amendments in this ASU, an
entity has the option to present the total of comprehensive income, the components of net income and the
components of other comprehensive income either in a single continuous statement of comprehensive income
or in two separate but consecutive statements. In both choices, an entity is required to present each component
of net income along with total net income, each component of other comprehensive income along with a total
for other comprehensive income and a total amount for comprehensive income. This ASU eliminates the
option to present the components of other comprehensive income as part of the statement of changes in
stockholders’ equity. The amendments in this update do not change the items that must be reported in other
comprehensive income or when an item of other comprehensive income must be reclassified to net
income. This new guidance was originally proposed to be effective for fiscal years, and interim periods within
those years, beginning after December 15, 2011 and applied retrospectively. In October 2011, the FASB
proposed to indefinitely defer the specific requirement to present items that are reclassified from other
comprehensive income to net income alongside their respective components of net income and other
comprehensive income on the face of the respective statements; entities still must comply with the existing
requirements during the deferral period. The remaining requirements of ASU 2011-05 are effective for the
Company as of the beginning of its first quarter of 2012. The Company is currently evaluating the effects of
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g
the
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uidance in the ASU.
(b) In September 2011, the FASB issued ASU No. 2011-08, Testing Goodwill for Impairment, which amends the
guidance in ASC 350-20. The amendments in ASU 2011-08 provide entities with the option of performing a
qualitative assessment before performing the first step of the two-step impairment test. If entities determine, on
the basis of qualitative factors, it is not more likely than not that the fair value of the reporting unit is less than
the carrying amount, then performing the two-step impairment test would be unnecessary. However, if an
entity concludes otherwise, then it is required to perform the first step of the two-step impairment test by
calculating the fair value of the reporting unit and comparing the fair value with the carrying amount of the
reporting unit. If the carrying amount of a reporting unit exceeds its fair value, then the entity is required to
perform the second step of the goodwill impairment test to measure the amount of the impairment loss, if any.
ASU 2011-08 also provides entities with the option to bypass the qualitative assessment for any reporting unit
in any period and proceed directly to the first step of the two-step impairment test. ASU 2011-08 is effective
for interim and annual periods beginning after December 15, 2011 but early adoption is permitted. The
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y
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the effects of ado
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uidance in the ASU.
(c) In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement: Amendments to Achieve Common
Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs, which updated the guidance
in ASC Topic 820, Fair Value Measurement. ASU 2011-04 clarifies the application of existing fair value
measurement requirements including (1) the application of the highest and best use and valuation premise
concepts, (2) measuring the fair value of an instrument classified in a reporting entity’s shareholders’ equity,
and (3) quantitative information required for fair value measurements categorized within Level 3. ASU 2011-
04 also provides guidance on measuring the fair value of financial instruments managed within a portfolio, and
application of premiums and discounts in a fair value measurement. In addition, ASU 2011-04 requires
additional disclosure for Level 3 measurements regarding the sensitivity of fair value to changes in
unobservable inputs and any interrelationships between those inputs. The amendments in this guidance are to
be applied prospectively, and are effective for interim and annual periods beginning after December 15, 2011,
and early application is not permitted. The Company is currently evaluating the effects of adopting the
g
uidance in the ASU.