Stamps.com 2003 Annual Report Download - page 50

Table of Contents
STAMPS.COM INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
combinations initiated after June 30, 2001 to be accounted for using the purchase method of accounting, and broadens the criteria for recording
intangible assets separate from goodwill. SFAS No. 142 requires the use of a non-
amortization approach to account for purchased goodwill and
certain intangibles. Under a non-amortization approach, goodwill and certain intangibles will not be amortized into results of operations, but
instead would be reviewed for impairment and written down and charged to results of operations only in the periods in which the recorded
value of goodwill and certain intangibles is more than its fair value. The adoption of SFAS No. 141 and SFAS No. 142 on January 1, 2002, did
not have a material impact on the financial position or results of operations of the Company.
The FASB also recently issued SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets" , applicable to financial
statements issued for fiscal years beginning after December 15, 2001. The FASB’s new rules on asset impairment supersede SFAS No. 121,
“Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" , and portions of Accounting Principles
Bulletin Opinion 30, “Reporting the Results of Operations”. This Standard provides a single accounting model for long-lived assets to be
disposed of and significantly changes the criteria that would have to be met to classify an asset as held-for-sale. Classification as held-for-sale
is an important distinction since such assets are not depreciated and are stated at the lower of fair value and carrying amount. This Standard
also requires expected future operating losses from discontinued operations to be displayed in the period(s) in which the losses are incurred,
rather than as of the measurement date as presently required. The adoption of the provision of this Standard on January 1, 2002 did not have a
material impact on the Company’s financial position or operating results.
In June 2002, the FASB issued SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities”, effective for exit or
disposal activities that are initiated after December 31, 2002. SFAS No. 146 addresses financial accounting and reporting for costs associated
with exit or disposal activities and nullifies Emerging Issues Task Force Issue No. 94-3, “Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)” and requires that a liability for
a cost associated with an exit or disposal activity be recognized when the liability is incurred and not at the date of an entity’s commitment to
an exit plan. The adoption of SFAS No. 146 did not have a material impact on its financial position or its results of operations.
In December 2002, the FASB issued SFAS No. 148, “Accounting for Stock-Based Compensation – Transition and Disclosure, an
Amendment of FASB Statement No. 123”. This statement amends SFAS 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 requirement of SFAS No. 123 to require prominent disclosure 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 this statement in December 2002 and its adoption did not have a material impact on its financial position or
results of operations.
In May 2003, the FASB issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and
Equity,” effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective as of July 1, 2003. The
adoption of SFAS No. 150 did not have a material impact on the financial position or the results of operations of the Company.
In January 2003, the FASB issued FASB Interpretation No. (“FIN”) 46, “Consolidation of Variable Interest Entities,” which was originally
effective on July 1, 2003. In December 2003, the FASB deferred the effective date for applying the provisions of FIN 46 to March 31, 2004 for
interests held by public companies in variable interest entities or potential variable entities created before February 1, 2003. The Company has
completed its evaluation of the provisions of FIN 46 and does not have any significant interests in variable interest entities. Accordingly, the
adoption of FIN 46 did not have a material impact on the financial position or the results of operations of the Company.
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