This excerpt taken from the AGYS 10-K filed Jun 12, 2007.
Recently Issued Accounting Standards
In February 2007, the FASB issued Statement No. 159, The Fair Value Option for Financial Assets and Financial Liabilities including an amendment of FASB Statement No. 115 ( Statement 159). Statement 159 allows measurement at fair value of eligible financial assets and liabilities that are not otherwise measured at fair value. If the fair value option for an eligible item is elected, unrealized gains and losses for that item will be reported in current earnings at each subsequent reporting date. Statement 159 also establishes presentation and disclosure requirements designed to draw comparison between the different measurement attributes the company elects for similar types of assets and liabilities. Statement 159 is effective for fiscal years beginning after November 15, 2007, with early adoption permitted. The company does not expect the adoption of Statement 159 to have a material impact on its financial position, results of operations or cash flows.
In September 2006, the SEC released Staff Accounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements When Quantifying Misstatements in Current Year Financial Statements (SAB 108). SAB 108 provides guidance on how the effects of the carryover or reversal of prior year financial statement misstatements should be considered in quantifying a current year misstatement. Prior practice allowed the evaluation of materiality on the basis of (1) the error quantified as the amount by which the current year income statement was misstated (rollover method) or (2) the cumulative error quantified as the cumulative amount by which the current year balance sheet was misstated (iron curtain method). SAB 108 is effective for fiscal years ending after November 15, 2006. The adoption of SAB 108 by the company in 2007 did not have a material impact on its financial position, results of operations or cash flows.
In September 2006, the FASB issued Statement No. 158, Employers Accounting for Defined Benefit Pension and Other Postretirement Plans, and amendment of FASB Statements No. 87, 88, 106, and 132(R) (Statement 158). Statement 158 requires companies with publicly traded equity securities that sponsor postretirement benefit plans to fully recognize, as an asset or liability, the overfunded or underfunded status of its benefit plans in its balance sheet. The funded status is measured as the difference between the fair value of the plans assets and its benefit obligation. Statement 158 also requires companies to measure the funded status of a plan as of the date of its year-end statement of financial position, with limited exceptions. The company was required to adopt the recognition and disclosure provisions of Statement 158 on March 31, 2007. As a result of adopting Statement 158 on March 31, 2007, the companys Supplemental Executive Retirement Plan benefit obligation increased $3.7 million before taxes, with a corresponding offset to accumulated other comprehensive loss.
In September 2006, the FASB issued Statement No. 157, Fair Value Measurements (Statement 157). Statement 157 provides a single definition of fair value, a framework for measuring fair value, and expanded disclosures concerning fair value. Previously, different definitions of fair value were contained in various accounting pronouncements creating inconsistencies in measurement and disclosures. Statement 157 applies under those previously issued pronouncements that prescribe fair value as the relevant measure of value, except SFAS No. 123R and related interpretations and pronouncements that require or permit measurement similar to fair value but are not intended to measure fair value. This pronouncement is effective for the company on April 1, 2008. The company does not expect the adoption of Statement 157 to have a material impact on its financial position, results of operations or cash flows.
In June 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes an Interpretation of SFAS No. 109 (FIN 48). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an entitys financial statements in accordance with SFAS No. 109, Accounting for Income Taxes. The pronouncement prescribes a recognition threshold and measurement attributable to financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition associated with tax positions. FIN 48 is effective for the company as of April 1, 2007. The cumulative effect of applying the provisions of FIN 48 will be reported by the company in its first quarter of fiscal year 2008 consolidated financial statements as an adjustment to the beginning balance of retained earnings. The company is currently evaluating the effect the adoption of FIN 48 will have on its financial position, results of operations and related disclosures; however, the company expects that the adoption of the pronouncement may decrease the beginning balance of retained earnings within a range of $2.5 million to $4.0 million. This estimate is subject to revision as the company continues its analysis.