RLRN » Topics » Recent Accounting Pronouncement

These excerpts taken from the RLRN 10-K filed Mar 3, 2008.
Recent Accounting Pronouncement
 
In December 2007, the FASB issued SFAS No. 141(R) Business Combination (“SFAS 141R”). SFAS 141R establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any noncontrolling interest in the acquiree and the goodwill acquired. SFAS 141R also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. SFAS 141R is effective for us on January 1, 2009. SFAS 141R is not expected to have a material effect on our consolidated financial statements.
 
In December 2007, the FASB issued SFAS No. 160 Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51 (“SFAS 160”). 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. This new consolidation method will significantly change the accounting for transactions with minority interest holders. SFAS 160 is effective for us on January 1, 2009. SFAS 160 is not expected to have a material effect on our consolidated financial statements.
 
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”). This standard permits entities to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. The provisions of SFAS 159 are effective for us on January 1, 2008 and are not expected to have a material effect on our consolidated financial statements.
 
In September 2006, the FASB issued SFAS No. 157 Fair Value Measurements, (“SFAS 157”), to establish a consistent framework for measuring fair value and expand disclosures on fair value measurements. The provisions of SFAS 157 are effective for us on January 1, 2008 and are not expected to have a material effect on our consolidated financial statements.
 
Item 7A.  Quantitative and Qualitative Disclosures About Market Risk
 
Interest Rate Risk. Our exposure to market interest rate risk consists of: (i) the increase or decrease in the amount of interest income we can earn on our investment portfolio and (ii) the decrease or increase in value of our investment security portfolio if market interest rates increase or decrease, respectively. We anticipate that we will have sufficient liquidity to hold our investments to maturity; therefore, we do not expect to recognize any material losses or gains related to an increase or decrease in market interest rates.
 
Market Risk. Our exposure to market risk relates to the quality of the holdings in our investment security portfolio. The fair market value of our investments is subject to increases or decreases in value resulting from the performance of the securities issuer, from upgrades or downgrades in the credit worthiness of the securities issuer, upgrades or downgrades in the credit worthiness and the insurer of the securities and from changes in general market conditions.
 
We seek to manage our exposure to market risk by investing in accordance with our corporate investment policy as established by our Board of Directors. The goals of the policy are: (i) preservation of capital, (ii) provision of adequate liquidity to meet projected cash requirements, (iii) minimization of risk of principal loss through diversified short and medium term investments and (iv) maximization of yields in relationship to the guidelines, risk, market conditions and tax considerations.
 
Our investment policy permits investments in obligations of the U.S. Treasury department and its agencies, money market funds, and high quality investment-grade corporate and municipal interest-bearing obligations. The policy requires diversification to prevent excess concentration of issuer risk and requires the maintenance of minimum liquidity levels. The policy precludes investment in equity securities except for the specific purpose of funding the obligations related to our Supplemental Executive Retirement Plan (see Note 12 of our Notes to Consolidated Financial Statements). As of December 31, 2007, our investment securities had a market value of approximately $17.2 million and a carrying value of $17.1 million. Due to the type and duration of our investments, we do not expect to realize any material gains or losses related to market risk.


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Foreign Currency Exchange Rate Risk. The financial position and results of operations of our foreign subsidiaries are measured using local currency. Revenues and expenses of such subsidiaries have been translated into U.S. dollars using average exchange rates prevailing during the period. Assets and liabilities have been translated at the rates of exchange on the balance sheet date. Translation gains or losses are deferred as a separate component of shareholders’ equity. Aggregate foreign currency transaction gains and losses are included in determining net income. As such, our operating results are affected by fluctuations in the value of the U.S. dollar compared to the British pound, Canadian dollar, Euro and Indian rupee. At this time, foreign exchange rate risk is not significant due to the relative size of our foreign operations and revenues derived from sales in foreign currency.


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Table of Contents

Item 8.  Financial Statements and Supplementary Data
 
Recent
Accounting Pronouncement



 



In December 2007, the FASB issued SFAS No. 141(R)
Business Combination (“SFAS 141R”).
SFAS 141R establishes principles and requirements for how
an acquirer recognizes and measures in its financial statements
the identifiable assets acquired, the liabilities assumed, any
noncontrolling interest in the acquiree and the goodwill
acquired. SFAS 141R also establishes disclosure
requirements to enable the evaluation of the nature and
financial effects of the business combination. SFAS 141R is
effective for us on January 1, 2009. SFAS 141R is not
expected to have a material effect on our consolidated financial
statements.


 



In December 2007, the FASB issued SFAS No. 160
Noncontrolling Interests in Consolidated Financial
Statements, an amendment of ARB No. 51
(“SFAS 160”). 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. This new consolidation method will
significantly change the accounting for transactions with
minority interest holders. SFAS 160 is effective for us on
January 1, 2009. SFAS 160 is not expected to have a
material effect on our consolidated financial statements.


 



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”). This standard
permits entities to measure many financial instruments and
certain other items at fair value. The objective is to improve
financial reporting by providing entities with the opportunity
to mitigate volatility in reported earnings caused by measuring
related assets and liabilities differently without having to
apply complex hedge accounting provisions. The provisions of
SFAS 159 are effective for us on January 1, 2008 and
are not expected to have a material effect on our consolidated
financial statements.


 



In September 2006, the FASB issued SFAS No. 157
Fair Value Measurements, (“SFAS 157”), to
establish a consistent framework for measuring fair value and
expand disclosures on fair value measurements. The provisions of
SFAS 157 are effective for us on January 1, 2008 and
are not expected to have a material effect on our consolidated
financial statements.


 















Item 7A. 

Quantitative
and Qualitative Disclosures About Market Risk



 



Interest Rate Risk. Our exposure to market interest
rate risk consists of: (i) the increase or decrease in the
amount of interest income we can earn on our investment
portfolio and (ii) the decrease or increase in value of our
investment security portfolio if market interest rates increase
or decrease, respectively. We anticipate that we will have
sufficient liquidity to hold our investments to maturity;
therefore, we do not expect to recognize any material losses or
gains related to an increase or decrease in market interest
rates.


 



Market Risk. Our exposure to market risk relates to
the quality of the holdings in our investment security
portfolio. The fair market value of our investments is subject
to increases or decreases in value resulting from the
performance of the securities issuer, from upgrades or
downgrades in the credit worthiness of the securities issuer,
upgrades or downgrades in the credit worthiness and the insurer
of the securities and from changes in general market conditions.


 



We seek to manage our exposure to market risk by investing in
accordance with our corporate investment policy as established
by our Board of Directors. The goals of the policy are:
(i) preservation of capital, (ii) provision of
adequate liquidity to meet projected cash requirements,
(iii) minimization of risk of principal loss through
diversified short and medium term investments and
(iv) maximization of yields in relationship to the
guidelines, risk, market conditions and tax considerations.


 



Our investment policy permits investments in obligations of the
U.S. Treasury department and its agencies, money market
funds, and high quality investment-grade corporate and municipal
interest-bearing obligations. The policy requires
diversification to prevent excess concentration of issuer risk
and requires the maintenance of minimum liquidity levels. The
policy precludes investment in equity securities except for the
specific purpose of funding the obligations related to our
Supplemental Executive Retirement Plan (see Note 12 of our
Notes to Consolidated Financial Statements). As of
December 31, 2007, our investment securities had a market
value of approximately $17.2 million and a carrying value
of $17.1 million. Due to the type and duration of our
investments, we do not expect to realize any material gains or
losses related to market risk.





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Table of Contents






Foreign Currency Exchange Rate Risk. The financial
position and results of operations of our foreign subsidiaries
are measured using local currency. Revenues and expenses of such
subsidiaries have been translated into U.S. dollars using
average exchange rates prevailing during the period. Assets and
liabilities have been translated at the rates of exchange on the
balance sheet date. Translation gains or losses are deferred as
a separate component of shareholders’ equity. Aggregate
foreign currency transaction gains and losses are included in
determining net income. As such, our operating results are
affected by fluctuations in the value of the U.S. dollar
compared to the British pound, Canadian dollar, Euro and Indian
rupee. At this time, foreign exchange rate risk is not
significant due to the relative size of our foreign operations
and revenues derived from sales in foreign currency.





27





Table of Contents


















Item 8. 

Financial
Statements and Supplementary Data



 




This excerpt taken from the RLRN 10-K filed Mar 7, 2007.
Recent Accounting Pronouncement
 
In June 2006, the Financial Accounting Standards Board (FASB) issued Financial Interpretation No. 48 (FIN 48), “Accounting for Uncertainty in Income Taxes.” This interpretation provides specific guidance on how enterprises recognize and measure tax benefits associated with uncertain tax positions. FIN 48 is effective for us on January 1, 2007. We have evaluated FIN 48 and have determined that its adoption will not have a significant impact on our financial statements.


24


 

 
Item 7A.  Quantitative and Qualitative Disclosures About Market Risk
 
Interest Rate Risk. Our exposure to market interest rate risk consists of: (i) the increase or decrease in the amount of interest income we can earn on our investment portfolio and (ii) the decrease or increase in value of our investment security portfolio if market interest rates increase or decrease, respectively. We anticipate that we will have sufficient liquidity to hold our investments to maturity, therefore, we do not expect to recognize any material losses or gains related to an increase or decrease in market interest rates.
 
Market Risk. Our exposure to market risk relates to the quality of the holdings in our investment security portfolio. The fair market value of our investments is subject to increases or decreases in value resulting from the performance of the securities issuer, from upgrades or downgrades in the credit worthiness of the securities issuer and from changes in general market conditions.
 
We seek to manage our exposure to market risk by investing in accordance with our corporate investment policy as established by our Board of Directors. The goals of the policy are: (i) preservation of capital, (ii) provision of adequate liquidity to meet projected cash requirements, (iii) minimization of risk of principal loss through diversified short and medium term investments and (iv) maximization of yields in relationship to the guidelines, risk, market conditions and tax considerations.
 
Our investment policy permits investments in obligations of the U.S. Treasury department and its agencies, money market funds, and high quality investment-grade corporate and municipal interest-bearing obligations. The policy requires diversification to prevent excess concentration of issuer risk and requires the maintenance of minimum liquidity levels. The policy precludes investment in equity securities except for the specific purpose of funding the obligations related to our Supplemental Executive Retirement Plan (see Note 11 of our Notes to Consolidated Financial Statements). As of December 31, 2006, our investment securities had a market value of approximately $4.1 million and a carrying value of $4.1 million. Due to the type and duration of our investments we do not expect to realize any material gains or losses related to market risk.
 
Foreign Currency Exchange Rate Risk. The financial position and results of operations of our foreign subsidiaries are measured using local currency. Revenues and expenses of such subsidiaries have been translated into U.S. dollars using average exchange rates prevailing during the period. Assets and liabilities have been translated at the rates of exchange on the balance sheet date. Translation gains or losses are deferred as a separate component of shareholders’ equity. Aggregate foreign currency transaction gains and losses are included in determining net income. As such, our operating results are affected by fluctuations in the value of the U.S. dollar compared to the British pound, Canadian dollar, Euro, and Indian Rupee. At this time, foreign exchange rate risk is not significant due to the relative size of our foreign operations and revenues derived from sales in foreign currency.


25


 

Recent Accounting Pronouncement
 
In June 2006, the Financial Accounting Standards Board (FASB) issued Financial Interpretation No. 48 (FIN 48), “Accounting for Uncertainty in Income Taxes.” This interpretation provides specific guidance on how enterprises recognize and measure tax benefits associated with uncertain tax positions. FIN 48 is effective for us on January 1, 2007. We have evaluated FIN 48 and have determined that its adoption will not have a significant impact on our financial statements.


24


 

 
Item 7A.  Quantitative and Qualitative Disclosures About Market Risk
 
Interest Rate Risk. Our exposure to market interest rate risk consists of: (i) the increase or decrease in the amount of interest income we can earn on our investment portfolio and (ii) the decrease or increase in value of our investment security portfolio if market interest rates increase or decrease, respectively. We anticipate that we will have sufficient liquidity to hold our investments to maturity, therefore, we do not expect to recognize any material losses or gains related to an increase or decrease in market interest rates.
 
Market Risk. Our exposure to market risk relates to the quality of the holdings in our investment security portfolio. The fair market value of our investments is subject to increases or decreases in value resulting from the performance of the securities issuer, from upgrades or downgrades in the credit worthiness of the securities issuer and from changes in general market conditions.
 
We seek to manage our exposure to market risk by investing in accordance with our corporate investment policy as established by our Board of Directors. The goals of the policy are: (i) preservation of capital, (ii) provision of adequate liquidity to meet projected cash requirements, (iii) minimization of risk of principal loss through diversified short and medium term investments and (iv) maximization of yields in relationship to the guidelines, risk, market conditions and tax considerations.
 
Our investment policy permits investments in obligations of the U.S. Treasury department and its agencies, money market funds, and high quality investment-grade corporate and municipal interest-bearing obligations. The policy requires diversification to prevent excess concentration of issuer risk and requires the maintenance of minimum liquidity levels. The policy precludes investment in equity securities except for the specific purpose of funding the obligations related to our Supplemental Executive Retirement Plan (see Note 11 of our Notes to Consolidated Financial Statements). As of December 31, 2006, our investment securities had a market value of approximately $4.1 million and a carrying value of $4.1 million. Due to the type and duration of our investments we do not expect to realize any material gains or losses related to market risk.
 
Foreign Currency Exchange Rate Risk. The financial position and results of operations of our foreign subsidiaries are measured using local currency. Revenues and expenses of such subsidiaries have been translated into U.S. dollars using average exchange rates prevailing during the period. Assets and liabilities have been translated at the rates of exchange on the balance sheet date. Translation gains or losses are deferred as a separate component of shareholders’ equity. Aggregate foreign currency transaction gains and losses are included in determining net income. As such, our operating results are affected by fluctuations in the value of the U.S. dollar compared to the British pound, Canadian dollar, Euro, and Indian Rupee. At this time, foreign exchange rate risk is not significant due to the relative size of our foreign operations and revenues derived from sales in foreign currency.


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