iHeartMedia 2003 Annual Report Download - page 50

Our earnings are also affected by fluctuations in the value of the U.S. dollar as compared to foreign currencies as a result of our investments
in various countries, all of which are accounted for under the equity method. It is estimated that the result of a 10% fluctuation in the value of
the dollar relative to these foreign currencies at December 31, 2003 would change our 2003 equity in earnings of nonconsolidated affiliates by
$2.2 million and would change our net income for the year ended December 31, 2003 by approximately $1.4 million. This analysis does not
consider the implications that such fluctuations could have on the overall economic activity that could exist in such an environment in the U.S.
or the foreign countries or on the results of operations of these foreign entities.
Recent Accounting Pronouncements
On January 1, 2003, we adopted Statement of Financial Accounting Standards No. 143, Accounting for Asset Retirement Obligations
(“Statement 143”). Statement 143 applies to legal obligations associated with the retirement of long-lived assets that result from acquisition,
construction, development and/or the normal operation of a long-lived asset. Adoption of this statement did not materially impact our financial
position or results of operations.
On January 1, 2003, we adopted Statement of Financial Accounting Standards No. 146, Accounting for Costs Associated with Exit or
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isposal Activities (“Statement 146”). Statement 146 addresses the accounting and reporting for costs associated with exit or disposal activities
and nullifies Emerging Issues Task Force (“EITF”) Issue No. 94-3, “Liability Recognition for Certain Employee Terminations Benefits and
Other Costs to Exit an Activity.” It also substantially amends EITF Issue No. 88-10, “Costs Associated with Lease Modification or
Termination.” Adoption of this statement did not materially impact our financial position or results of operations.
On January 1, 2003, we adopted Financial Accounting Standards Board Interpretation No. 45, Guarantor’s Accounting and Disclosure
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equirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others (“FIN 45”). FIN 45 applies to contracts or
indemnification agreements that contingently require the guarantor to make payments to the guaranteed party based on changes in an
underlying that is related to an asset, liability, or an equity security of the guaranteed party. FIN 45’s disclosure requirements were effective for
financial statements of interim or annual periods ending after December 15, 2002. FIN 45’s initial recognition and initial measurement
provisions were applicable on a prospective basis to guarantees issued or modified after December 31, 2002, irrespective of the guarantor’s
fiscal year-end. We adopted the disclosure requirements of this Interpretation for our 2002 annual report. Adoption of the initial recognition
and initial measurement requirements of FIN 45 did not materially impact our financial position or results of operations.
On January 1, 2003, the Financial Accounting Standards Board issued Financial Accounting Standards Board Interpretation No. 46,
Consolidation of Variable Interest Entities (“FIN 46”). In addition, on December 24, 2003, the Financial Accounting Standards Board issued a
revision of FIN 46 (the“Revised Interpretation”). The Revised Interpretation addresses consolidation of business enterprises of variable interest
entities and is effective for variable interest entities for the first fiscal year or interim period ending after March 15, 2004. We do not believe
the adoption of FIN 46 will have a material impact on our financial position or results of operations.
Critical Accounting Policies
The preparation of the Company’s financial statements in conformity Generally Accepted Accounting Principles requires management to
make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and
liabilities at the date of a financial statements and the reported amount of expenses during the reporting period. On an ongoing basis, we
evaluate our estimates that are based on historical experience and on various other assumptions that are believed to be reasonable under the
circumstances. The result of these evaluations forms the basis for making judgments about the carrying values of assets and liabilities and the
reported amount of expenses that are not readily apparent from other sources. Actual results may differ from these estimates under different
assumptions. The following accounting policies require significant management judgments and estimates.
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