TiVo 2007 Annual Report Download - page 71

Table of Contents
The TiVo service is enabled through the use of a DVR manufactured for TiVo by a third-party contract manufacturer. The Company also relies on third
parties with whom we outsource supply-chain activities related to inventory warehousing, order fulfillment, distribution, and other direct sales logistics. The
Company cannot be sure that these parties will perform their obligations as expected or that any revenue, cost savings, or other benefits will be derived from
the efforts of these parties. If any of these parties breaches or terminates their agreement with TiVo or otherwise fails to perform their obligations in a timely
manner, the Company may be delayed or prevented from commercializing its products and services.
Recent Accounting Pronouncements
In September 2006, the Financial Accounting Standards Board (FASB) issued Statement No. 157, "Fair Value Measurements" (SFAS 157). SFAS 157
defines fair value, establishes a framework and gives guidance regarding the methods used for measuring fair value, and expands disclosures about fair value
measurements. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those
fiscal years for financial instruments and for fiscal years beginning after November 15, 2008 for non-financial assets and liabilities. The Company is currently
evaluating the impact of SFAS 157, but does not expect the adoption of SFAS 157 to have a material effect on the Company's results of operation and
financial position.
In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, "Establishing the Fair Value Option for Financial Assets
and Liabilities" (SFAS 159). The FASB has issued SFAS 159 to permit all entities to elect, at specified election dates, to measure eligible financial
instruments at fair value. An entity shall report unrealized gains and losses on items for which the fair value option has been elected in earnings at each
subsequent reporting date, and recognize upfront costs and fees related to those items in earnings as incurred and not deferred. SFAS 159 applies to fiscal
years beginning after November 15, 2007, with early adoption permitted for an entity that has also elected to apply the provisions of SFAS 157. An entity is
prohibited from retrospectively applying SFAS 159, unless it chooses early adoption. SFAS 159 also applies to eligible items existing at November 15, 2007
(or early adoption date). The Company does not expect the adoption of SFAS 159 to have a material effect on the Company's results of operations and
financial position.
In June 2007, the FASB ratified Emerging Issues Task Force (EITF) Issue No. 07-3, "Accounting for Nonrefundable Advance Payments for Goods or
Services to Be Used in Future Research and Development Activities" (EITF 07-3). EITF 07-3 requires non-refundable advance payments for goods and
services to be used in future research and development activities to be recorded as an asset and expensing the payments when the research and development
activities are performed. EITF 07-3 applies prospectively for new contractual arrangements entered into in fiscal years beginning after December 15, 2007.
The adoption of EITF 07-3 is not expected to have a significant impact on TiVo's consolidated financial statements or financial position.
In December 2007, the FASB issued Statement of Financial Accounting Standards No. 160, "Noncontrolling Interests in Consolidated Financial
Statements, an amendment of ARB No. 51" (SFAS 160). The standard changes the accounting for noncontrolling (minority) interests in consolidated financial
statements including the requirements to classify noncontrolling interests as a component of consolidated stockholders' equity, to identify earnings attributable
to noncontrolling interests reported as part of consolidated earnings, and to measure gain or loss on the deconsolidated subsidiary based upon the fair value of
the noncontrolling equity investment. Additionally, SFAS 160 revises the accounting for both increases and decreases in a parent's controlling ownership
interest. SFAS 160 is effective for fiscal years beginning after December 15, 2008, with early adoption prohibited. The adoption of SFAS 160 is not expected
to have a significant impact on TiVo's consolidated financial statements or financial position.
In December 2007, the FASB issued Statement of Financial Accounting Standards No. 141 (revised), "Business Combinations" (SFAS 141R). The
standard changes the accounting for business combinations by requiring that an acquiring entity measure and recognize identifiable assets acquired and
liabilities assumed at the acquisition date fair value with limited exceptions. The changes include the treatment of acquisition-related transaction costs, the
valuation of any noncontrolling interest at acquisition date fair value, the recording of acquired contingent liabilities at acquisition date fair value and the
subsequent re-measurement of such liabilities after the acquisition date, the recognition of capitalized in-process research and development, the accounting for
acquisition-related restructuring cost accruals subsequent to the acquisition date, and the recognition of changes in the acquirer's income tax valuation
allowance. SFAS 141R is effective for fiscal years beginning after December 15, 2008, with early adoption prohibited. The adoption of SFAS 141R is not
expected to have a significant impact on Company's consolidated financial statements or financial position, but the nature and magnitude of the specific
effects will depend upon the nature, terms and size of the acquisitions the Company consummates after the effective date.
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