Wendy's 2008 Annual Report Download - page 137

The carrying amounts of current accounts and notes receivable, non-current notes receivable (excluding
the DFR Notes described above), advertising fund restricted assets and liabilities, accounts payable and accrued
expenses, other than the swap agreements detailed in the table above, approximated fair value due to the
related allowance for doubtful accounts and notes receivable and the short-term maturities of accounts and
notes receivable, accounts payable and accrued expenses and, accordingly, they are not presented in the table
above.
In September 2006, FASB issued SFAS No. 157, as amended, “Fair Value Measurements,” (“SFAS 157”).
SFAS 157 addresses issues relating to the definition of fair value, the methods used to measure fair value and
expanded disclosures about fair value measurements. SFAS 157 does not require any new fair value
measurements. The definition of fair value in SFAS 157 focuses on the price that would be received to sell an
asset or paid to transfer a liability, not the price that would be paid to acquire an asset or received to assume a
liability. The methods used to measure fair value should be based on the assumptions that market participants
would use in pricing an asset or a liability (“Market Value Approach”). SFAS 157 expands disclosures about the
use of fair value to measure assets and liabilities in interim and annual periods subsequent to adoption. FASB
Staff Position (“FSP”) No. FAS 157-1, “Application of FASB Statement No. 157 to FASB Statement No. 13
and Other Accounting Pronouncements that Address Fair Value Measurements for Purposes of Lease
Classification or Measurement under Statement 13” (“FSP FAS 157-1”), states that SFAS 157 does not apply
under SFAS No. 13, “Accounting for Leases” (“SFAS 13”), and other accounting pronouncements that address
fair value measurements for purposes of lease classification or measurement under SFAS 13. In addition, FSP
No. FAS 157-2, “Effective Date of FASB Statement No. 157” (“FSP FAS 157-2”), defers the application of
SFAS 157 to nonfinancial assets and nonfinancial liabilities until our 2009 fiscal year, except for items
recognized or disclosed on a recurring basis at least annually. FSP No. FAS 157-3, “Determining the Fair
Value of a Financial Asset in a Market that is Not Active,” (“FSP FAS 157-3”) clarifies the application of SFAS
157 when the market for a financial asset is inactive. This new guidance illustrates the fact that approaches
other than the Market Value Approach to determining fair value may be appropriate for instruments such as
those for which the market is no longer active. In utilizing these other approaches, however, the guidance
reiterates certain of the measurement principles described in SFAS 157. SFAS 157 was, with some limited
exceptions, applied prospectively and was effective commencing with our first fiscal quarter of 2008, with the
exception of the areas mentioned above under which exemptions to or deferrals of the application of certain
aspects of SFAS 157 apply. Our adoption of SFAS 157 and the related staff positions in 2008 did not result in
any change in the methods we use to measure the fair value of our financial assets and liabilities. We are
presenting the expanded fair value disclosures of SFAS 157 below.
The fair values of our financial assets or liabilities and the hierarchy of the level of inputs are summarized
below:
December 28,
2008 Level 1 Level 2 Level 3
Fair Value Measurements at
December 28, 2008 Using
Assets
Available-for-sale securities:
Short-term investments (Note 6) (b) ...................... $ 162 $ 162 $— $—
Restricted investments (Notes 6 and 8) (b)................ 30,271 30,271 — —
Total assets ........................................ $30,433 $30,433 $ — $ —
Liabilities
Securities sold with an obligation to purchase-restricted
(Note 8) (b) .............................................. $16,626 $16,626 $ — $ —
Other derivatives in liability positions-restricted (Notes 8
and 12) (b)............................................... 2,979 2,979 — —
Total liabilities .................................... $19,605 $19,605 $ — $ —
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Wendy’s/Arby’s Group, Inc. and Subsidiaries
(Formerly Triarc Companies, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(In Thousands Except Per Share Amounts)