WebEx 2002 Annual Report Download - page 46

WEBEX COMMUNICATIONS, INC.
December 31, 2002, 2001 and 2000
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands except share and per share amounts)
(t) Recent Accounting Pronouncements
On January 1, 2002, the Company 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 the
Company’s financial position, results of operations or cash flows as the Company has no recorded goodwill.
On January 1, 2002, the Company 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 Company adopted SFAS 144 on January 1, 2002,
and the adoption did not have a material effect on the 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 the Company’s 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 the Company 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 the Company’s 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-
based employee compensation and the effect of the method used on the reported results. The provisions of
SFAS 148 are effective for financial statements for fiscal years ending after December 15, 2002 and interim
periods beginning after December 15, 2002. The adoption of the disclosure requirements of this statement did not
impact the Company’s financial position, results of operations or cash flows.
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