SBN » Topics » Recent Accounting Pronouncements

These excerpts taken from the SBN 8-K filed Dec 13, 2006.

Note 10 – Recent Accounting Pronouncements

In May 2005, the FASB issued SFAS No. 154, Accounting Changes and Error Corrections-A replacement of APB Opinion No 20 and FASB Statement No. 30 (“SFAS 154”).  SFAS 154 replaces APB Opinion No. 20, Accounting Changes, and SFAS No. 3, Reporting Accounting Changes in Interim Financial Statements” and changes the requirements for the accounting for, and reporting of, a change in accounting principle.  SFAS 154 applies to all voluntary changes in accounting principles and changes required by an accounting pronouncement in the unusual instance that the pronouncement does not include specific transition provisions.  Under previous guidance, changes in accounting principle were recognized as a cumulative effect in the net income of the period of the change.  SFAS 154 requires retrospective application of changes in accounting principle, limited to the direct effects of the change, to prior periods’ financial statements, unless it is impracticable to determine either the period-specific effects or the cumulative effect of the change.  Additionally, SFAS 154 requires that a change in depreciation, amortization or depletion method for long-lived, non-financial assets be accounted for as a change in accounting estimate affected by a change in accounting principle and that correction of errors in previously issued financial statements should be termed a “restatement.”  The provisions of SFAS 154 are effective for accounting changes and correction of errors made in fiscal years beginning after December 15, 2005.  The Company does not expect the adoption of this pronouncement to have a material effect on its consolidated financial position, results of operations or cash flows.

In June 2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (“FIN 48”). FIN 48 clarifies the accounting for income taxes by prescribing a minimum probability threshold that a tax position must meet before a financial statement benefit is recognized.  This minimum threshold is defined as a tax position that is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position.  The tax benefit to be recognized is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement.  FIN 48 must be applied to all existing tax positions upon initial adoption.  The cumulative effect of applying FIN 48 at adoption, if any, is to be reported as an adjustment to opening retained earnings for the year of adoption.  FIN 48 is effective for fiscal years beginning after December 15, 2006, although early adoption is permitted.  The Company is currently evaluating the potential impact of FIN 48 on its consolidated financial statements.

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Recent Accounting Pronouncements

In December 2004, the FASB issued Statement No. 123R, a revision to Statement No. 123, “Accounting for Stock-Based Compensation.” This standard requires the Company to measure the cost of employee services received in exchange for equity awards based on the grant date fair value of the awards. The cost will be recognized as compensation expense over the vesting period of the awards. The Company will adopt SFAS 123R at the beginning of the first quarter of 2006. The standard

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provides for a prospective application. Under this method, the Company will begin recognizing compensation cost for equity based compensation for all new or modified grants after the date of adoption. In addition, the Company will recognize the unvested portion of the grant date fair value of awards issued prior to adoption based on the fair values previously calculated for disclosure purposes. The Company is evaluating the impact on the adoption of SFAS 123R.  However, it is expected that the Company’s expense for stock-based compensation will increase.

In December 2004, the FASB also issued SFAS No. 151, “Inventory Costs, an Amendment of ARB No. 43, Chapter 4,” which will become effective for the Company beginning January 1, 2006. This standard clarifies that abnormal amounts of idle facility expense, freight, handling costs and wasted material should be expensed as incurred and not included in overhead. In addition, this standard requires that the allocation of fixed production overhead costs to inventory be based on the normal capacity of the production facilities. The Company is currently evaluating the potential impact of this standard on its financial position and results of operations, but does not believe the impact of the change will be material.

In May 2005, the FASB issued SFAS No. 154, “Accounting Changes and Error Corrections-A replacement of APB Opinion No 20 and FASB Statement No. 30,” or (“SFAS 154”). SFAS 154 replaces APB Opinion No. 20, “Accounting Changes,” and SFAS No. 3, “Reporting Accounting Changes in Interim Financial Statements,” and changes the requirements for the accounting for, and reporting of, a change in accounting principles. SFAS 154 applies to all voluntary changes in accounting principles and changes required by an accounting pronouncement in the unusual instance that the pronouncement does not include specific transition provisions.

Under previous guidance, changes in accounting principle were recognized as a cumulative effect in the net income of the period of the change. SFAS 154 requires retrospective application of changes in accounting principle, limited to the direct effects of the change, to prior periods’ financial statements, unless it is impracticable to determine either the period-specific effects or the cumulative effect of the change. Additionally, SFAS 154 requires that a change in depreciation, amortization or depletion method for long-lived, non-financial assets be accounted for as a change in accounting estimate affected by a change in accounting principle and that correction of errors in previously issued financial statements should be termed a “restatement.” The provisions in SFAS 154 are effective for accounting changes and correction of errors made in fiscal years beginning after December 15, 2005. The Company does not expect the adoption of this pronouncement to have a material effect on its consolidated financial position, results of operations or cash flows.

This excerpt taken from the SBN 10-K filed Dec 20, 2005.

Recent Accounting Pronouncements

 

In December 2004, the Financial Accounting Standards Board published SFAS No. 123 (revised 2004), Share-Based Payment.  SFAS No. 123(R) revises SFAS No. 123, Accounting for Stock-Based Compensation, and supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees.  The revised statement addresses the accounting for share-based payment transactions with employees and other third parties, eliminates the ability to account for share-based payment transactions using APB Opinion No. 25, and requires that the compensation costs relating to such transactions be recognized in the consolidated statement of operations based on the grant-date fair value of those instruments. The revised statement is effective for the Company on October 1, 2005.  The Company will use the modified prospective method of adoption. The newly issued statement will have a material impact on results of operations and financial position.  See the “Stock-Based Compensation” discussion in Note 2 to the Financial Statements, which includes the pro forma impact of recognizing stock-based compensation under SFAS No. 123 on the Company’s net income (loss) and income (loss) per common share for the fiscal years ended September 30, 2005 and 2004 and the nine-month period ended September 30, 2003. Options granted to employees under the 2001 Stock Incentive Plan (the only form of award granted) now vest over a three- to four-year term from the date of grant. Vesting of outstanding options was accelerated in accordance with the terms of each option agreement on March 15, 2005, when the Company’s registration under Section 12(g) of the Securities Exchange Act of 1934 became effective.  As a result, the pro forma stock-based compensation expense for the year ended September 30, 2005 includes an additional $1.0 million taken in the quarter ended March 31, 2005, to record the effect of the acceleration provisions.

 

In December 2004, the FASB issued SFAS No. 153, Exchanges of Nonmonetary Assets - An Amendment of APB Opinion No. 29 (“SFAS No. 153”). The amendments made by SFAS No. 153 are based on the principle that exchanges of nonmonetary assets should be measured based on the fair value of the assets exchanged. Further, the amendments eliminate the narrow exception for nonmonetary exchanges of similar productive assets and replace it with a broader exception for exchanges of nonmonetary assets that do not have “commercial substance.” The provisions in SFAS No. 153 are effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005, which is effective with our first quarter of fiscal 2006. Adoption of this standard is not expected to have a material impact on our consolidated financial statements.

 

In May 2005, the FASB issued SFAS No. 154, Accounting Changes and Error Corrections — A replacement of APB Opinion No 20 and FASB Statement No. 30  (“SFAS No. 154”).  SFAS No. 154 changes the requirement for the accounting for and reporting of a change in accounting principle.  This statement applies to all voluntary changes in accounting principles and changes required by an accounting pronouncement in the unusual instance that the pronouncement does not include specific transition provisions.  The provisions in SFAS No. 154 are effective for accounting changes and correction of errors made in fiscal years beginning after December 15, 2005, which is effective with our first quarter of our fiscal year ending September 30, 2007.  We intend to adopt the disclosure requirements upon the effective date of the pronouncement.  Since this pronouncement relates to disclosure only requirements, the adoption will have no impact on our consolidated financial statements.

 

This excerpt taken from the SBN 10-Q filed Oct 6, 2005.

Recent Accounting Pronouncements

 

In December 2004, the Financial Accounting Standards Board published SFAS No. 123 (revised 2004), Share-Based Payment.  SFAS No. 123(R) revises SFAS No. 123, Accounting for Stock-Based Compensation, and supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees.  The revised statement addresses the accounting for share-based payment transactions with employees and other third parties, eliminates the ability to account for share-based payment transactions using APB Opinion No. 25, and requires that the compensation costs relating to such transactions be recognized in the consolidated statement of operations based on the grant-date fair value of those instruments.  The revised statement is effective for us on October 1, 2005.  We are currently determining what impact the newly issued statement will have on our results of operations and financial position.  See the “Stock-Based Compensation” discussion in Note 3 to the Consolidated Financial Statements, which includes the pro forma impact of recognizing stock-based compensation under SFAS No. 123, on our net loss and loss per common share for the three and nine months ended June 30, 2005 and 2004.

 

This excerpt taken from the SBN 10-Q filed Oct 6, 2005.

Recent Accounting Pronouncements

 

In December 2004, the Financial Accounting Standards Board published SFAS No. 123 (revised 2004), Share-Based Payment.  SFAS No. 123(R) revises SFAS No. 123, Accounting for Stock-Based Compensation, and supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees.  The revised statement addresses the accounting for share-based payment transactions with employees and other third parties, eliminates the ability to account for share-based payment transactions using APB Opinion No. 25 and requires that the compensation costs relating to such transactions be recognized in the consolidated statement of operations based on the grant-date fair value of those instruments. The revised statement is effective as of the first interim period beginning after June 15, 2005.  We are currently determining what impact the newly issued statement will have on our results of operations and financial position.  See the “Stock-Based Compensation” discussion in Note 3 to the Consolidated Financial Statements, which includes the pro forma impact of recognizing stock-based compensation under SFAS No. 123, on our net loss and loss per common share for the quarters ended December 31, 2004 and 2003.

 

This excerpt taken from the SBN 10-Q filed Oct 6, 2005.

Recent Accounting Pronouncements

 

In December 2004, the Financial Accounting Standards Board published SFAS No. 123 (revised 2004), Share-Based Payment.  SFAS No. 123(R) revises SFAS No. 123, Accounting for Stock-Based Compensation, and supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees.  The revised statement addresses the accounting for share-based payment transactions with employees and other third parties, eliminates the ability to account for share-based payment transactions using APB Opinion No. 25 and requires that the compensation costs relating to such transactions be recognized in the consolidated statement of operations based on the grant-date fair value of those instruments. The revised statement is effective for us on October 1, 2005.  We are currently determining what impact the newly issued statement will have on our results of operations and financial position.  See the “Stock-Based Compensation” discussion in Note 3 to the Consolidated Financial Statements, which includes the pro forma impact of recognizing stock-based compensation under SFAS No. 123, on our net loss and loss per common share for

 

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the three and six months ended March 31, 2005 and 2004.

 

This excerpt taken from the SBN 10-Q filed Aug 19, 2005.

Recent Accounting Pronouncements

 

In December 2004, the Financial Accounting Standards Board published SFAS No. 123 (revised 2004), Share-Based Payment.  SFAS No. 123(R) revises SFAS No. 123, Accounting for Stock-Based Compensation, and supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees.  The revised statement addresses the accounting for share-based payment transactions with employees and other third parties, eliminates the ability to account for share-based payment transactions using APB Opinion No. 25, and requires that the compensation costs relating to such transactions be recognized in the consolidated statement of operations based on the grant-date fair value of those instruments.  The revised statement is effective for us on October 1, 2005.  We are currently determining what impact the newly issued statement will have on our results of operations and financial position.  See the “Stock-Based Compensation” discussion in Note 3 to the Consolidated Financial Statements, which includes the pro forma impact of recognizing stock-based compensation under SFAS No. 123, on our net loss and loss per common share for the three and nine months ended June 30, 2005 and 2004.

 

This excerpt taken from the SBN 10-Q filed May 16, 2005.

Recent Accounting Pronouncements

 

In December 2004, the Financial Accounting Standards Board published SFAS No. 123 (revised 2004), Share-Based Payment.  SFAS No. 123(R) revises SFAS No. 123, Accounting for Stock-Based Compensation, and supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees.  The revised statement addresses the accounting for share-based payment transactions with employees and other third parties, eliminates the ability to account for share-based payment transactions using APB Opinion No. 25 and requires that the compensation costs relating to such transactions be recognized in the consolidated statement of operations based on the grant-date fair value of those instruments. The revised statement is effective for us on October 1, 2005.  We are currently determining what impact the newly issued statement will have on our results of operations and financial position.  See the “Stock-Based Compensation” discussion in Note 3 to the Consolidated Financial Statements, which includes the pro forma impact of recognizing stock-based compensation under SFAS No. 123, on our net loss and loss per common share for

 

21



 

the three and six months ended March 31, 2005 and 2004.

 

This excerpt taken from the SBN 10-Q filed May 6, 2005.

Recent Accounting Pronouncements

 

In December 2004, the Financial Accounting Standards Board published SFAS No. 123 (revised 2004), Share-Based Payment.  SFAS No. 123(R) revises SFAS No. 123, Accounting for Stock-Based Compensation, and supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees.  The revised statement addresses the accounting for share-based payment transactions with employees and other third parties, eliminates the ability to account for share-based payment transactions using APB Opinion No. 25 and requires that the compensation costs relating to such transactions be recognized in the consolidated statement of operations based on the grant-date fair value of those instruments. The revised statement is effective as of the first interim period beginning after June 15, 2005.  We are currently determining what impact the newly issued statement will have on our results of operations and financial position.  See the “Stock-Based Compensation” discussion in Note 3 to the Consolidated Financial Statements, which includes the pro forma impact of recognizing stock-based compensation under SFAS No. 123, on our net loss and loss per common share for the quarters ended December 31, 2004 and 2003.

 

This excerpt taken from the SBN 10-Q filed Mar 15, 2005.

Recent Accounting Pronouncements

 

In December 2004, the Financial Accounting Standards Board published SFAS No. 123 (revised 2004), Share-Based Payment.  SFAS No. 123(R) revises SFAS No. 123, Accounting for Stock-Based Compensation, and supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees.  The revised statement addresses the accounting for share-based payment transactions with employees and other third parties, eliminates the ability to account for share-based payment transactions using APB Opinion No. 25 and requires that the compensation costs relating to such transactions be recognized in the consolidated statement of operations based on the grant-date fair value of those instruments. The revised statement is effective as of the first interim period beginning after June 15, 2005.  We are currently determining what impact the newly issued statement will have on our results of operations and financial position.  See the “Stock-Based Compensation” discussion in Note 3 to the Consolidated Financial Statements, which includes the pro forma impact of recognizing stock-based compensation under SFAS No. 123, on our net loss and loss per common share for the quarters ended December 31, 2004 and 2003.

 

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