THQ 2008 Annual Report Download - page 40

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In December 2007, the FASB issued SFAS No. 141R, ‘‘Business Combinations’’ (‘‘FAS 141R’’). FAS 141R
retains the fundamental requirements in FAS 141 that the acquisition method of accounting (which
FAS 141 called the purchase method) be used for all business combinations and for an acquirer to be
identified for each business combination. FAS 141R defines the acquirer as the entity that obtains control
of one or more businesses in the business combination and establishes the acquisition date as the date that
the acquirer achieves control. FAS 141R is effective for business combination transactions for which the
acquisition date is on or after the beginning of the first annual reporting period beginning on or after
December 15, 2008, which will be our fiscal year 2010. We are evaluating the impact, if any, the adoption of
this statement will have on our results of operations, financial position or cash flows.
In April 2008, the FASB issued FSP FAS 142-3, ‘‘Determination of the Useful Life of Intangible Assets’’
(‘‘FSP 142-3’’). FSP 142-3 amends the factors that should be considered in developing renewal or extension
assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142,
‘‘Goodwill and Other Intangible Assets’’ (‘‘FAS 142’’). This change is intended to improve the consistency
between the useful life of a recognized intangible asset under FAS 142 and the period of expected cash
flows used to measure the fair value of the asset under FAS 141R and other GAAP. FSP 142-3 is effective
for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods
within those fiscal years, which will be our fiscal year 2010. The requirement for determining useful lives
must be applied prospectively to intangible assets acquired after the effective date and the disclosure
requirements must be applied prospectively to all intangible assets recognized as of, and subsequent to, the
effective date. We do not expect the adoption of this statement to have a material impact on our results of
operations, financial position or cash flows.
In December 2007, the FASB issued SFAS No. 160, ‘‘Noncontrolling Interests in Consolidated Financial
Statements’’ (‘‘FAS 160’’). This Statement amends ARB 51 to establish accounting and reporting standards
for the non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a
non-controlling interest in a subsidiary is an ownership interest in the consolidated entity that should be
reported as equity in the consolidated financial statements. FAS 160 is effective for fiscal years and interim
periods within those fiscal years, beginning on or after December 15, 2008, which will be our fiscal year
2010. We are evaluating the impact, if any, the adoption of this statement will have on our results of
operations, financial position or cash flows.
In March 2008, the FASB issued SFAS No. 161, ‘‘Disclosures about Derivative Instruments and Hedging
Activities—an amendment of FASB Statement No. 133’’ (‘‘FAS 161’’). This Statement changes the
disclosure requirements for derivative instruments and hedging activities. Under FAS 161, entities are
required to provide enhanced disclosures about (a) how and why an entity uses derivative instruments,
(b) how derivative instruments and related hedged items are accounted for under Statement 133 and its
related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s
financial position, financial performance, and cash flows. FAS 161 is effective for financial statements
issued for fiscal years and interim periods beginning after November 15, 2008, which will be our fiscal year
2010. We are evaluating the impact, if any, the adoption of this statement will have on our results of
operations, financial position or cash flows.
In December 2007, the FASB ratified the Emerging Issues Task Force’s (‘‘EITF’’) consensus on EITF Issue
No 07-1, ‘‘Accounting for Collaborative Arrangements’’ that discusses how parties to a collaborative
arrangement (which does not establish a legal entity within such arrangement) should account for various
activities. The consensus indicates that costs incurred and revenues generated from transactions with third
parties (i.e. parties outside of the collaborative arrangement) should be reported by the collaborators on
the respective line items in their income statements pursuant to EITF Issue No. 99-19, ‘‘Reporting
Revenue Gross as a Principal Versus Net as an Agent’’. Additionally, the consensus provides that income
statement characterization of payments between the participation in a collaborative arrangement should
be based upon existing authoritative pronouncements; analogy to such pronouncements if not within their
scope; or a reasonable, rational, and consistently applied accounting policy election. EITF Issue No. 07-1 is
32