WebEx 2002 Annual Report Download - page 21

as marketing, reduce planned capital expenditures or limit the growth of personnel. If cash generated from
operations is insufficient to satisfy our liquidity requirements, we may seek to sell additional public or private
equity securities or obtain additional debt financing. There can be no assurance that additional financing would
be available at all or, if available, would be obtainable on terms favorable to us. If we are unable to obtain
additional financing, we may be required to reduce the scope of our planned technology and product
development and sales and marketing efforts, which could harm our business, financial condition and operating
results. Additional financing may also be dilutive to our existing stockholders.
Recent Accounting Pronouncements
On January 1, 2002, we adopted SFAS 142, “Goodwill and Other Intangible Assets”, which requires the
discontinuance of goodwill amortization and that it be assessed for impairment on an annual basis or more
frequently if impairment indicators exist. The adoption of SFAS 142 did not have any effect on our financial
position or results of operations or cash flows as we have no recorded goodwill.
On January 1, 2002, we adopted Statement of Financial Accounting Standards No. 144, “Accounting for the
Impairment or Disposal of Long-Lived Assets,” (“SFAS 144”). SFAS 144 supercedes SFAS No. 121,
“Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of,” and elements of
APB 30, “Reporting the Results of Operations—Reporting the Effects on Disposal of a Segment of a Business
and Extraordinary, Unusual or Infrequently Occurring Events and Transactions.” SFAS 144 establishes a single-
accounting model for long-lived assets to be disposed of while maintaining many of the provisions relating to
impairment testing and valuation. The adoption of SFAS 144 on January 1, 2002 did not have a material effect on
our financial position or results of operations.
In April 2002, Statement of Financial Accounting Standards No. 145, “Rescission of FASB Statements No.
4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections,” was issued. This statement
provides guidance on the classification of gains and losses from the extinguishment of debt and on the
accounting for certain specified lease transactions. The adoption of this statement did not have a material impact
on our financial position, results of operations or cash flows.
In June 2002, Statement of Financial Accounting Standards No. 146, “Accounting for Costs Associated with
Exit or Disposal Activities,” (“SFAS 146”) was issued. This statement provides guidance on the recognition and
measurement of liabilities associated with disposal activities and is effective on January 1, 2003. Under SFAS
146, companies will record the fair value of exit or disposal costs when they are incurred rather than at the date
of a commitment to an exit or disposal plan. The adoption of SFAS 146 could result in our recognizing the cost
of future restructuring activities, if any, over a period of time rather than in one reporting period.
In November 2002, the Financial Accounting Standards Board issued Interpretation No. 45, “Guarantor’s
Accounting and Disclosure Requirements for Guarantees, Including Guarantees of Indebtedness of Others,”
(“FIN 45”). FIN 45 requires the Company to recognize, at the inception of a guarantee, a liability for the fair
value of the obligation undertaken in the issuance of the guarantee. FIN 45 is effective for guarantees issued or
modified after December 31, 2002. The disclosure requirements effective for the year ending December 31, 2002
expand the disclosures required by a guarantor about its obligations under a guarantee. The adoption of the
disclosure requirements of this statement did not impact our financial position, results of operations or cash
flows.
In December 2002, Statement of Financial Accounting Standards No. 148, “Accounting for Stock-Based
Compensation—Transition and Disclosure,” (“SFAS 148”) was issued. SFAS 148 amends Statement of
Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation,” (“SFAS 123”) to provide
alternative methods of transition for a voluntary change to the fair value method of accounting for stock-based
employee compensation. In addition, SFAS 148 amends the disclosure requirements of SFAS 123 to require
prominent disclosures in both annual and interim financial statements about the method of accounting for stock-
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