Western Digital 2000 Annual Report Download - page 47

WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (Continued)
ReclassiÑcations
Certain prior years' amounts have been reclassiÑed to conform to the current year presentation.
New Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board (""FASB'') issued Statement of Financial
Accounting Standards No. 133, ""Accounting for Derivative Instruments and Hedging Activities''
(""SFAS 133''). SFAS 133 was eÅective for all Ñscal quarters for Ñscal years beginning after June 15, 1999. In
August 1999, the FASB issued Statement of Financial Accounting Standards No. 137, ""Accounting for
Derivative Instruments and Hedging Activities Ì Deferral of the EÅective Date of FASB Statement No. 133,
an amendment of FASB Statement No. 133'' (""SFAS 137''), which defers the eÅective date of SFAS 133 to
all Ñscal quarters for Ñscal years beginning after June 15, 2000. In June 2000, the FASB issued Statement of
Financial Accounting Standards No. 138, ""Accounting for Certain Derivative Instruments and Certain
Hedging Activities, an Amendment of FASB Statement No. 133''. SFAS 133, as amended, establishes
accounting and reporting standards for derivative instruments embedded in other contracts and for hedging
activities. The application of these statements is not expected to have a material impact on the Company's
consolidated Ñnancial position, results of operations or liquidity, and the Company does not anticipate
recording a signiÑcant adjustment as a result of the transition to these statements.
In December 1999, the Securities and Exchange Commission (""SEC'') issued StaÅ Accounting Bulletin
101 (""SAB101'') ""Revenue Recognition in Financial Statements''. This StaÅ Accounting Bulletin summa-
rizes certain of the staÅ's views in applying generally accepted accounting principles to revenue recognition in
Ñnancial statements. The Company will be required to follow the guidance in SAB101 no later than its fourth
quarter of 2001, with restatement of earlier quarters in 2001 required, if necessary. The SEC has recently
indicated it intends to issue further guidance with respect to adoption of speciÑc issues addressed by SAB101.
Until such time as this additional guidance is issued, the Company is unable to assess the impact, if any,
SAB101 may have on its consolidated Ñnancial position or results of operations.
In March 2000, the FASB issued Interpretation No. 44 ""Accounting for Certain Transactions Involving
Stock Compensation Ì an interpretation of APB Opinion No. 25'' (""FIN 44''). This Interpretation clariÑes
the deÑnition of an employee for purposes of applying Accounting Principles Board Opinion No. 25,
""Accounting for Stock Issued to Employees'' (""APB 25''), the criteria for determining whether a plan
qualiÑes as a noncompensatory plan, the accounting consequence of various modiÑcations to the terms of a
previously Ñxed stock option or award, and the accounting for an exchange of stock compensation awards in a
business combination. This Interpretation is eÅective July 1, 2000, but certain conclusions in this Interpreta-
tion cover speciÑc events that occur after either December 15, 1998 or January 12, 2000. The adoption of
FIN 44 is not expected to have a material impact on the Company's consolidated Ñnancial position, results of
operations or liquidity.
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