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This excerpt taken from the SMG 10-Q filed May 6, 2009. Combinations
In
December 2007, the FASB issued SFAS No. 141(R), “Business Combinations”
(“SFAS 141(R)”), which replaced SFAS 141. The objective of
SFAS 141(R) is to improve the relevance, representational faithfulness and
comparability of the information that a reporting entity provides in its
financial reports about a business combination and its effects. SFAS 141(R)
establishes principles and requirements for how the acquirer recognizes and
measures in its financial statements the identifiable assets acquired, the
liabilities assumed and any noncontrolling interest in the acquiree; recognizes
and measures the goodwill acquired in the business combination or the gain from
a bargain purchase; and determines what information to disclose to enable users
of the financial statements to evaluate the nature and financial effects of the
business combination. SFAS 141(R) applies to all transactions or other
events in which an entity (the “acquirer”) obtains control of one or more
businesses (the “acquiree”), including those sometimes referred to as “true
mergers” or “mergers of equals” and combinations achieved without the transfer
of consideration. In April 2009, the FASB issued FASB Staff Position 141(R)-1,
“Accounting for Assets Acquired and Liabilities Assumed in a Business
Combination That Arise from Contingencies” (“FSP FAS 141(R)-1”),
which amends and clarifies SFAS 141(R) to address application issues of
SFAS 141(R) arising from contingencies in a business combination.
SFAS 141(R) and FSP FAS 141(R)-1 will be effective for the Company’s
financial statements for the fiscal year beginning October 1,
2009.
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