iRobot 2007 Annual Report Download - page 109

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Recent Accounting Pronouncements
In September 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 157, Fair Value
Measurements which defines fair value, establishes guidelines for measuring fair value and expands disclosures
regarding fair value measurements. SFAS 157 does not require any new fair value measurements but rather
eliminates inconsistencies in guidance found in various prior accounting pronouncements. SFAS 157 is effective for
fiscal years beginning after November 15, 2007. However, on February 12, 2008, the FASB issued FSP FAS 157-2
which delays the effective date of SFAS 157 for all nonfinancial assets and nonfinancial liabilities, except those that
are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). This FSP
partially defers the effective date of Statement 157 to fiscal years beginning after November 15, 2008, and interim
periods within those fiscal years for items within the scope of this FSP. Effective for fiscal 2008, the company will
adopt SFAS 157 except as it applies to those nonfinancial assets and nonfinancial liabilities as noted in FSP
FAS 157-2. The partial adoption of SFAS 157 is not expected to have a material impact on the Company’s results of
operations or financial condition.
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial
Liabilities — Including an Amendment of FASB Statement No. 115 (“SFAS 159”). SFAS 159 permits entities to
choose fair value measurement for many financial instruments and certain other items as of specified election dates.
Business entities will thereafter report in earnings the unrealized gains and losses on items for which the fair value
option has been chosen. The fair value option may be applied instrument by instrument, may not be applied to
portions of instruments and is irrevocable unless a new election date occurs. SFAS 159 is effective for an entity’s
first fiscal year beginning after November 15, 2007. The Company is currently evaluating the potential impact of
adoption of SFAS 159 and has not yet determined the impact, if any, that its adoption will have on its results of
operations or financial condition.
In December 2007, the FASB issued SFAS No. 141 (revised 2007) (“SFAS 141R”), Business Combinations
and SFAS No. 160 (“SFAS 160”), Noncontrolling Interests in Consolidated Financial Statements, an amendment of
Accounting Research Bulletin No. 51. SFAS 141R will change how business acquisitions are accounted for and will
impact financial statements both on the acquisition date and in subsequent periods. SFAS 160 will change the
accounting and reporting for minority interests, which will be recharacterized as noncontrolling interests and
classified as a component of equity. The provisions of SFAS 141R and SFAS 160 are effective for fiscal years
beginning on or after December 15, 2008. The Company is currently evaluating the impact that SFAS 141R and
SFAS 160 will have on its results of operations or financial condition.
From time to time, new accounting pronouncements are issued by FASB that are adopted by the Company as of
the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued
standards, which are not yet effective, will not have a material impact on the Company’s consolidated financial
statements upon adoption.
3. Inventory
Inventory consists of the following at:
December 29,
2007
December 30,
2006
(In thousands)
Raw materials ........................................... $ 1,641 $ 1,248
Work in process .......................................... 517 311
Finished goods ........................................... 43,064 19,331
$45,222 $20,890
75
iROBOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Form 10-K