iRobot 2009 Annual Report Download - page 89

Form 10-K
recharacterized as noncontrolling interests and classified as a component of equity. These amendments are effective
for fiscal years beginning on or after December 15, 2008. We adopted these amendments at the beginning of fiscal
2009 and will change our accounting treatment for business combinations and noncontrolling interests, if any, on a
prospective basis.
On April 1, 2009, FASB issued an amendment to the accounting and disclosure requirements for assets
acquired and liabilities assumed in a business combination that arise from contingencies. This amendment
addresses application issues regarding the initial recognition and measurement, subsequent measurement and
accounting, and disclosure of assets and liabilities arising from contingencies in a business combination. We
adopted this amendment on April 1, 2009 and will change our accounting treatment for business combinations, if
any, on a prospective basis.
In May 2009, FASB issued an amendment to the accounting and disclosure requirements for subsequent
events. This amendment establishes general standards of accounting for disclosing events that occur after the
balance sheet date but before financial statements are issued or are available to be issued. It requires the disclosure
of the date through which an entity has evaluated subsequent events and the basis for selecting that date, that is,
whether that date represents the date the financial statements were issued or were available to be issued. This
amendment is effective for interim or annual financial periods ending after June 15, 2009. The implementation of
this amendment did not impact our consolidated financial statements.
In June 2009, FASB issued an amendment to the accounting and disclosure requirements for the consolidation
of variable interest entities, or VIEs. The elimination of the concept of a Qualifying Special Purpose Entity removes
the exception from applying the consolidation guidance within this amendment. This amendment requires an
enterprise to perform a qualitative analysis when determining whether or not it must consolidate a VIE. This
amendment also requires an enterprise to continuously reassess whether it must consolidate a VIE. Additionally,
this amendment requires enhanced disclosures about an enterprise’s involvement with VIEs and any significant
change in risk exposure due to that involvement, as well as how its involvement with VIEs impacts the enterprise’s
financial statements. Finally, an enterprise will be required to disclose significant judgments and assumptions used
to determine whether or not to consolidate a VIE. This amendment is effective for financial statements issued for
fiscal years beginning after November 15, 2009. We do not expect this amendment to have an impact on our
financial position or results of operations.
In June 2009, FASB issued FASB Accounting Standards Codification, or the Codification. The Codification
will become the single source for all authoritative Generally Accepted Accounting Principles, or GAAP recognized
by FASB to be applied for financial statements issued for periods ending after September 15, 2009. The
Codification does not change GAAP and will not have an effect on our financial position or results of operations.
We adopted this accounting standard during the three month period ending September 26, 2009.
In September 2009, FASB issued an amendment to the accounting and disclosure requirements for multiple-
deliverable revenue arrangements. This guidance addresses how to separate deliverables and how to measure and
allocate consideration to one or more units of accounting. Specifically, the guidance requires that consideration be
allocated among multiple deliverables based on relative selling prices. The guidance establishes a selling price
hierarchy of (1) vendor-specific objective evidence, (2) third-party evidence and (3) estimated selling price. This
guidance is effective for annual periods beginning after December 15, 2009 but may be early adopted as of the
beginning of an annual period. We are currently evaluating the effect that this guidance will have on our financial
position and results of operations.
From time to time, new accounting pronouncements are issued by FASB and are adopted by us as of the
specified effective date. Unless otherwise discussed, We believe that the impact of recently issued standards, which
are not yet effective, will not have a material impact on our consolidated financial statements upon adoption.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Foreign Currency Exchange Risk
We maintain sales and business operations in foreign countries. As such, we have exposure to adverse changes
in exchange rates associated with operating expenses of our foreign operations, but we believe this exposure to be
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