Washington Post 2005 Annual Report Download - page 57

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the award. The Company is required to adopt SFAS 123R in the first a cumulative effect of change in accounting. In the first quarter of
quarter of 2006. SFAS 123R will have a minimal impact on the 2006, the Company expects to report an estimated $5.0 million as
Company's results of operations for Company stock options as the an after-tax charge for the cumulative effect of change in account-
Company adopted the fair-value-based method of accounting for ing for Kaplan equity awards.
Company stock options in 2002, and all unvested stock options at Note G to the Consolidated Financial Statements provides addition-
January 2, 2006 are accounted for under the fair-value-based al details surrounding The Washington Post Company and Kaplan
method of accounting. The new standard will require the Company stock compensation plans.
to change its accounting for Kaplan equity awards (Kaplan stock
options and Kaplan shares or share equivalents) from the intrinsic EITF Topic D-108, ""Use of the Residual Method to Value Acquired
value method to the fair-value-based method of accounting. This Assets Other than Goodwill,'' required companies that had applied
change is expected to result in the acceleration of expense recogni- the residual method to value intangible assets to perform an impair-
tion for Kaplan equity awards; however, it will not impact the overall ment test on those intangible assets using the direct method by the
Kaplan stock compensation expense that will ultimately be recorded end of the first quarter of 2005. The Company completed such an
over the life of the award. The Company has elected to report the impairment test at its cable division in the first quarter of 2005 and
impact of SFAS 123R on the adoption date of January 2, 2006 as no impairment charge was required.
2005 FORM 10-K 41