Plantronics 2001 Annual Report Download - page 18

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Stock-Based Compensation. Statement of Financial Accounting Standards No. 123, “Accounting
for Stock-Based Compensation” (“SFAS 123”), encourages, but does not require, companies
to record compensation cost for stock-based employee compensation plans based on the fair
value of options granted. We have elected to continue to account for stock-based compen-
sation using the intrinsic value method prescribed in Accounting Principles Board Opinion
No. 25, “Accounting for Stock Issued to Employees” and related interpretations, and to
provide additional disclosures with respect to the pro forma effects of adoption had we
recorded compensation expense as provided in SFAS 123 (see note 10).
Recent Accounting Pronouncements. In June 1998, the Financial Accounting Standards Board
issued SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities.”
SFAS 133 requires that all derivative instruments be recognized in the balance sheet at their
fair market value and the corresponding derivative gains or losses be either reported in the
statement of operations or deferred as a component of other comprehensive income in share-
holders’ equity, depending on the type of hedging relationship that exists with respect to
such derivatives. In July 1999, the Financial Accounting Standards Board issued SFAS No.
137, “Accounting for Derivative Instruments and Hedging Activities—Deferral of the
Effective Date of FASB Statement 133” (SFAS 137). SFAS No. 137 deferred the effective
date until fiscal years commencing after June 15, 2000. In June 2000, the FASB issued SFAS
138, “Accounting for Certain Derivative Instruments and Certain Hedging Activities—An
Amendment of FASB Statement No. 133,” which deferred the effective date until the
quarter ending March 31, 2001. Although we did not engage in hedging activities in fiscal
2001, in fiscal 2002 we have introduced programs to reduce our foreign currency exposure
and mitigate exchange rate risks. Accordingly, we have adopted SFAS 133 in fiscal 2002.
In December 1999, the Securities and Exchange Commission (“SEC”) issued Staff Account-
ing Bulletin No. 101, “Revenue Recognition in Financial Statements” (“SAB 101”). SAB
101, as amended, summarizes certain of the SEC’s views in applying generally accepted
accounting principles to revenue recognition in financial statements. The adoption of SAB
101 did not have a material effect on our operations or financial position in fiscal 2001.
Reclassifications. Certain reclassifications have been made to prior year balances in order to
conform to the current year presentation.
Plantronics 2001 Annual Report 14