Supercuts 2010 Annual Report Download - page 99

Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
1. BUSINESS DESCRIPTION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Disclosures about Fair Value of Financial Instruments
In April 2009, the FASB issued guidance on disclosures about fair value of financial instruments to be presented in interim financial
statements in addition to annual financial statements. The Company adopted the new disclosure guidance about fair value of financial
instruments on July 1, 2009.
In January 2010, the FASB issued guidance to amend the disclosure requirements related to recurring and nonrecurring fair value
measurements. The guidance requires new disclosures on the transfers of assets and liabilities between Level 1 (quoted prices in active market
for identical assets or liabilities) and Level 2 (significant other observable inputs) of the fair value measurement hierarchy, including the
reasons and the timing of the transfers. Additionally, the guidance requires a roll forward of activities on purchases, sales, issuance, and
settlements of the assets and liabilities measured using significant unobservable inputs (Level 3 fair value measurements).
The Company adopted the new disclosure guidance on January 1, 2010, except for the disclosure on the roll forward activities for Level 3
fair value measurements, which will be adopted by the Company on July 1, 2011.
Participating Securities Granted in Share
-Based Payment Transactions
In June 2008, the FASB issued guidance that clarified all share-based payment awards that contain rights to non-forfeitable dividends
participate in undistributed earnings with common shareholders. Therefore, awards of this nature are considered participating securities and the
two-class method of computing basic and diluted earnings per share must be applied rather than the treasury stock method. In addition, once
effective, all prior period earnings per share data presented must be adjusted retrospectively to conform to the provisions of the guidance.
The Company's outstanding unvested restricted stock awards do not contain rights to non-forfeitable dividends and as a result, the
adoption of the new guidance on July 1, 2009, had no impact on the Company's diluted earnings per share.
Equity Method Investment Accounting Considerations
In November 2008, the FASB issued guidance that indicates, among other things, that transaction costs for an investment should be
included in the cost of the equity-method investment (and not expensed) and shares subsequently issued by the equity-method investee that
reduce the investor's ownership percentage should be accounted for as if the investor had sold a proportionate share of its investment, with
gains or losses recorded through earnings.
The adoption of the new guidance on July 1, 2009, for equity method investment accounting considerations did not have a material effect
on the Company's financial position, results of operations and cash flows.
Accounting Standards Recently Issued But Not Yet Adopted by the Company:
Multiple
-Deliverable Revenue Arrangements
In October 2009, the FASB issued guidance on the accounting for multiple-deliverable revenue arrangements. The guidance removes the
criterion that entities must use objective and reliable evidence of fair value in separately accounting for deliverables and provides entities with a
hierarchy of evidence
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