Rayovac 2009 Annual Report Download - page 83

Table of Contents
Index to Financial Statements
extending similar arrangements or, in the absence of historical experience, must consider assumptions that market participants would use about renewal or
extension. The new guidance requires certain additional disclosures beginning October 1, 2009 and prospective application to useful life estimates for
intangible assets acquired after September 30, 2009. We are in the process of evaluating the impact that the guidance may have on our financial statements
and related disclosures.
Employers’ Disclosures About Postretirement Benefit Plan Assets
In December 2008, the FASB issued new accounting guidance on employers’ disclosures about assets of a defined benefit pension or other
postretirement plan. It requires employers to disclose information about fair value measurements of plan assets. The objectives of the disclosures are to
provide an understanding of: (a) how investment allocation decisions are made, including the factors that are pertinent to an understanding of investment
policies and strategies, (b) the major categories of plan assets, (c) the inputs and valuation techniques used to measure the fair value of plan assets, (d) the
effect of fair value measurements using significant unobservable inputs on changes in plan assets for the period and (e) significant concentrations of risk
within plan assets. The disclosures required are effective for our financial statements for the fiscal year that began October 1, 2009. We are in the process of
evaluating the impact that the guidance may have on our financial statement disclosures.
Accounting for Transfers of Financial Assets
In June 2009, the FASB issued new accounting guidance to improve the information provided in financial statements concerning transfers of financial
assets, including the effects of transfers on financial position, financial performance and cash flows, and any continuing involvement of the transferor with
the transferred financial assets. The provisions are effective for our financial statements for the fiscal year beginning October 1, 2010. We are in the process
of evaluating the impact that the guidance may have on our financial statements and related disclosures.
Variable Interest Entities
In June 2009, the FASB issued new accounting guidance requiring an enterprise to perform an analysis to determine whether the enterprise’s variable
interest or interests give it a controlling financial interest in a variable interest entity. It also requires enhanced disclosures that will provide users of financial
statements with more transparent information about an enterprise’s involvement in a variable interest entity. The provisions are effective for our financial
statements for the fiscal year beginning October 1, 2010. We are in the process of evaluating the impact that the guidance may have on our financial
statements and related disclosures.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market Risk Factors
We have market risk exposure from changes in interest rates, foreign currency exchange rates and commodity prices. We use derivative financial
instruments for purposes other than trading to mitigate the risk from such exposures.
A discussion of our accounting policies for derivative financial instruments is included in Note 3(r), Significant Accounting Policies and
Practices−Derivative Financial Instruments, of Notes to Consolidated Financial Statements included in this Annual Report on Form 10−K.
Interest Rate Risk
We have bank lines of credit at variable interest rates. The general level of U.S. interest rates, LIBOR and EURIBOR affect interest expense. We use
interest rate swaps to manage such risk. The net amounts to be paid or received under interest rate swap agreements are accrued as interest rates change, and
are recognized over the life
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