Rayovac 2003 Annual Report Download - page 44

In April 2002, the FASB issued Statement No. 145, Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and
Technical Corrections. The Statement addresses, among other things, the income statement treatment of gains and losses related to debt
extinguishments, requiring such expenses to no longer be treated as extraordinary items, unless the items meet the definition of
extraordinary per APB Opinion No. 30, Reporting the Results of Operations—Reporting the Effects of Disposal of a Segment of a Business, and Extra-
ordinary, Unusual and Infrequently Occurring Events and Transactions. The Company adopted this Statement on October 1, 2002. As a result, the
write-off of unamortized debt issuance costs of $3,072 associated with the replacement of our previous credit facility in October 2002
and $8,587 associated with our redemption of our subordinated debt in June 2001 are classified as Non-operating expense in our
Consolidated Statements of Operations for the years ended September 30, 2003 and 2001, respectively. Previously, the premium of
$8,587 associated with the redemption of our subordinated debt in 2001 was shown as an extraordinary item.
In July 2002, the FASB issued Statement No. 146, Accounting for Costs Associated with Exit or Disposal Activities. Statement No. 146 nullifies
EITF 94-3, Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructur-
ing). According to the Statement, commitments to a plan to exit an activity or dispose of long-lived assets will no longer be enough
to record a one-time charge for most anticipated costs. Instead, companies will record exit or disposal costs when they are “incurred”
and can be measured at fair value, and they will subsequently adjust the recorded liability for changes in estimated fair value. State-
ment No. 146 also revises accounting for specified employee and contract terminations that are part of restructuring activities.
Statement No. 146 is effective for exit and disposal activities that are initiated after December 31, 2002. The Company applied the
provisions of EITF 94-3 to the restructuring initiatives announced and committed to, prior to December 31, 2002, during 2003 (See
2003 Restructuring summary within footnote 15, Restructuring Charges). The adoption of Statement No. 146 may impact the
timing of recognition of future exit or disposal activities. The Company believes that the adoption of Statement No. 146 will not
have a significant impact on its consolidated financial statements.
In November 2002, the FASB issued Interpretation No. 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others. This Interpretation addresses, among other things, the disclosure to be made by a guarantor in its
interim and annual financial statements about its obligations under guarantees. The Interpretation also requires the recognition of
a liability by a guarantor at the inception of certain guarantees. The Company has adopted the disclosure requirements of the Inter-
pretation, and applied the recognition and measurement provisions for all guarantees entered into or modified after December 31,
2002. Adoption did not have a material effect on the consolidated financial statements of the Company.
In December 2002, the FASB issued Statement No. 148, Accounting for Stock-Based Compensation—Transition and Disclosure. This Statement
amends FASB Statement No. 123, Accounting for Stock-Based Compensation, to provide alternative methods of transition for a voluntary
change to the fair value based method of accounting for stock-based employee compensation. In addition, this Statement amends
the disclosure requirements of Statement No. 123 to require prominent disclosures in both annual and interim financial statements
about the method of accounting for stock-based employee compensation and the effect of the method used on reported results.
The Company adopted the disclosure provisions of Statement No. 148 as seen in footnote 2(w), Stock Compensation.
In January 2003, the FASB issued Interpretation No. 46, Consolidation of Variable Interest Entities. Interpretation No. 46 addresses consolida-
tion by business enterprises of variable interest entities. The interpretation applies immediately for variable interest entities created
after January 31, 2003, and to variable interest entities in which an enterprise obtains an interest after that date. For existing variable
interest entities or investments in such, the interpretation applies in the first fiscal year or interim period beginning after December
15, 2003. Adoption did not have a material effect on the consolidated financial statements of the Company.
In April 2003, the FASB issued Statement No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities. FASB Statements
No. 133, Accounting for Derivative Instruments and Hedging Activities, and No. 138, Accounting for Certain Derivative Instruments and Certain Hedging
Activities, establish accounting and reporting standards for derivative instruments including derivatives embedded in other contracts
and for hedging activities. Statement No. 149 amends Statement No. 133 for certain decisions by the FASB as part of the Derivatives
Implementation Group (“DIG”) process. Statement No. 149 is effective for contracts entered into or modified after June 30, 2003, and
is effective for hedging relationships designated after June 30, 2003, except for certain transition and effective dates relating to other
amendments that principally resulted from the DIG process. Adoption did not have a material effect on the consolidated financial
statements of the Company.
Notes to Consolidated Financial Statements
Rayovac Corporation and Subsidiaries
(In thousands, except per share amounts)
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