UNCA » Topics » Recent Accounting Pronouncements

These excerpts taken from the UNCA 10-K filed Dec 15, 2008.
Recent Accounting Pronouncements
 
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurement, which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. Where applicable, SFAS No. 157 simplifies and codifies related guidance within GAAP. This statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. In February 2008, the FASB deferred the implementation of SFAS No. 157 for certain non-financial assets and liabilities for fiscal years beginning after November 15, 2008. The Company is analyzing the expected impact from adopting this statement on its financial statements, but currently does not believe its adoption will have a significant impact on the financial position or results of operations of the Company.
 
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities, which allows companies the option to measure financial assets or liabilities at fair value and include unrealized gains and losses in net income rather than equity. This becomes available when the Company adopts SFAS No. 157, which will be fiscal year 2009. The Company is analyzing the expected impact from adopting this statement on its financial statements, but currently does not believe its adoption will have a significant impact on the financial position or results of operations of the Company.
 
In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations. This statement establishes principles and requirements for how the acquirer in a business combination (i) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree, (ii) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase, and (iii) determines what information to disclose to enable


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users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS No. 141R is effective for fiscal years beginning after December 15, 2008 and, as such, the Company will adopt this standard in fiscal 2010. The impact of the standard on our financial position and results of operations will be dependent upon the number of and magnitude of the acquisitions that are consummated once the standard is effective.
 
In April 2008, the FASB issued FASB Staff Position No. FAS 142-3, “Determination of Useful Life of Intangible Assets,” or FSP 142-3. FSP 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142 “Goodwill and Other Intangible Assets,” or SFAS 142. FSP 142-3 is intended to improve the consistency between the useful life of an intangible asset determined under SFAS 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS No. 141(R), “Business Combinations,” or SFAS 141(R), and other U.S. generally accepted accounting principles, or GAAP. FSP 142-3 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. Early adoption is not permitted. The Company is currently evaluating the effect that the adoption of FSP 142-3 will have on its results of operations and financial condition.
 
Recent
Accounting Pronouncements



 



In September 2006, the FASB issued SFAS No. 157,
Fair Value Measurement, which defines fair value,
establishes a framework for measuring fair value, and expands
disclosures about fair value measurements. Where applicable,
SFAS No. 157 simplifies and codifies related guidance
within GAAP. This statement is effective for financial
statements issued for fiscal years beginning after
November 15, 2007, and interim periods within those fiscal
years. In February 2008, the FASB deferred the implementation of
SFAS No. 157 for certain non-financial assets and
liabilities for fiscal years beginning after November 15,
2008. The Company is analyzing the expected impact from adopting
this statement on its financial statements, but currently does
not believe its adoption will have a significant impact on the
financial position or results of operations of the Company.


 



In February 2007, the FASB issued SFAS No. 159, The
Fair Value Option for Financial Assets and Financial
Liabilities
, which allows companies the option to measure
financial assets or liabilities at fair value and include
unrealized gains and losses in net income rather than equity.
This becomes available when the Company adopts
SFAS No. 157, which will be fiscal year 2009. The
Company is analyzing the expected impact from adopting this
statement on its financial statements, but currently does not
believe its adoption will have a significant impact on the
financial position or results of operations of the Company.


 



In December 2007, the FASB issued SFAS No. 141
(revised 2007), Business Combinations. This statement
establishes principles and requirements for how the acquirer in
a business combination (i) recognizes and measures in its
financial statements the identifiable assets acquired, the
liabilities assumed, and any noncontrolling interest in the
acquiree, (ii) recognizes and measures the goodwill
acquired in the business combination or a gain from a bargain
purchase, and (iii) determines what information to disclose
to enable





46





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users of the financial statements to evaluate the nature and
financial effects of the business combination.
SFAS No. 141R is effective for fiscal years beginning
after December 15, 2008 and, as such, the Company will
adopt this standard in fiscal 2010. The impact of the standard
on our financial position and results of operations will be
dependent upon the number of and magnitude of the acquisitions
that are consummated once the standard is effective.


 



In April 2008, the FASB issued FASB Staff Position
No. FAS 142-3,
“Determination of Useful Life of Intangible Assets,”
or
FSP 142-3.
FSP 142-3
amends the factors that should be considered in developing
renewal or extension assumptions used to determine the useful
life of a recognized intangible asset under
SFAS No. 142 “Goodwill and Other Intangible
Assets,” or SFAS 142.
FSP 142-3
is intended to improve the consistency between the useful life
of an intangible asset determined under SFAS 142 and the
period of expected cash flows used to measure the fair value of
the asset under SFAS No. 141(R), “Business
Combinations,” or SFAS 141(R), and other
U.S. generally accepted accounting principles, or GAAP.
FSP 142-3
is effective for financial statements issued for fiscal years
beginning after December 15, 2008, and interim periods
within those fiscal years. Early adoption is not permitted. The
Company is currently evaluating the effect that the adoption of
FSP 142-3
will have on its results of operations and financial condition.


 




These excerpts taken from the UNCA 10-K filed Jan 7, 2008.
Recent Accounting Pronouncements
 
In September 2006, the SEC issued SAB 108, Considering the Effects of Prior Year Misstatements when Qualifying Misstatements in Current Year Financial Statements” which provides interpretive guidance on the consideration of the effects of prior year misstatements in quantifying current year misstatements for the purpose of a materiality assessment.
 
We adopted SAB 108 as of October 1, 2005 and had applied its provisions using the cumulative effect transition method which required us to reverse $510,000 of excess allowance for doubtful accounts for uncorrected errors. The excess allowance for doubtful accounts as of September 30, 2003 was approximately $410,000 and had accumulated over several years. The excess allowance for doubtful accounts increased by approximately $80,000 and $20,000 during the years ended September 30, 2004 and 2005, respectively. The excess allowance for doubtful accounts was the result of our business practice, which started in the fiscal year ended September 30, 1998, to record a general provision to protect against future loss exposure. These errors had not previously been material to any of those prior periods when measured using the roll-over method. We recorded this cumulative effect adjustment net of tax, resulting in a decrease to short-term deferred tax assets of $201,000. As a result, the net adjustment was recorded as an increase to retained earnings as of October 1, 2005 of $309,000.
 
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities, which allows companies the option to measure financial assets or liabilities at fair value and include unrealized gains and losses in net income rather than equity. This becomes available when the Company adopts SFAS 157, which will be fiscal year 2009. The Company is analyzing the expected impact from adopting this statement on its financial statements, but currently does not believe its adoption will have a significant impact on the financial position or results of operations of the Company.
 
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. Where applicable, this Statement simplifies and codifies related guidance within generally accepted accounting principles (GAAP). This statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Company is currently analyzing the expected impact from adopting this statement on its financial statements, but currently does not believe its adoption will have a significant impact on the financial position or results of operations of the Company.
 
In September 2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes — an Interpretation of FASB Statement No. 109 (“FIN 48”). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in companies’ financial statements in accordance with FASB Statement No. 109, “Accounting for Income Taxes,” and provides guidance on financial statement recognition and disclosure for tax positions taken or expected to be taken on a tax return. The evaluation of a tax position in accordance with FIN 48 is a two-step process. The first step is recognition whereby companies must determine whether it is more likely than not that a tax position will be sustained upon examination. The second step is measurement whereby a tax position that meets the more-likely-than-not recognition threshold is measured to determine the amount of benefit to recognize in the financial statements. FIN 48 also provides guidance on derecognition of recognized tax benefits, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The guidance of FIN 48 is applicable for fiscal years beginning after December 15, 2006. The Company will adopt FIN 48 at the beginning of fiscal 2008. The Company is in the process of evaluating whether the adoption of FIN 48 will have a material effect on the Company’s financial position, results of operations or cash flows.
 
In December 2007, the FASB issued SFAS 141(revised 2007), Business Combinations (“SFAS 141R”). SFAS 141R will significantly change the accounting for business combinations in a number of areas including the treatment of contingent consideration, contingencies, acquisition costs, IPR&D and restructuring costs. In addition, under SFAS 141R, changes in deferred tax asset valuation allowances and acquired income tax uncertainties in a business combination after the measurement period will impact income tax expense. SFAS 141R is effective for fiscal years beginning after December 15, 2008 and, as such, we will adopt this


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standard in fiscal 2010. We have not yet determined the impact, if any, of SFAS 141R on our consolidated financial statements.
 
In December 2007, the FASB issued SFAS 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 (NCI) 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 fiscal years beginning after December 15, 2008 and, as such, we will adopt this standard in fiscal 2010. We have not yet determined the impact, if any, of SFAS 160 on our consolidated financial statements.
 
Recent
Accounting Pronouncements



 



In September 2006, the SEC issued SAB 108, Considering
the Effects of Prior Year Misstatements when Qualifying
Misstatements in Current Year Financial Statements”
which provides interpretive guidance on the consideration of
the effects of prior year misstatements in quantifying current
year misstatements for the purpose of a materiality assessment.


 



We adopted SAB 108 as of October 1, 2005 and had
applied its provisions using the cumulative effect transition
method which required us to reverse $510,000 of excess allowance
for doubtful accounts for uncorrected errors. The excess
allowance for doubtful accounts as of September 30, 2003
was approximately $410,000 and had accumulated over several
years. The excess allowance for doubtful accounts increased by
approximately $80,000 and $20,000 during the years ended
September 30, 2004 and 2005, respectively. The excess
allowance for doubtful accounts was the result of our business
practice, which started in the fiscal year ended
September 30, 1998, to record a general provision to
protect against future loss exposure. These errors had not
previously been material to any of those prior periods when
measured using the roll-over method. We recorded this cumulative
effect adjustment net of tax, resulting in a decrease to
short-term deferred tax assets of $201,000. As a result, the net
adjustment was recorded as an increase to retained earnings as
of October 1, 2005 of $309,000.


 



In February 2007, the FASB issued SFAS No. 159, The
Fair Value Option for Financial Assets and Financial
Liabilities
, which allows companies the option to measure
financial assets or liabilities at fair value and include
unrealized gains and losses in net income rather than equity.
This becomes available when the Company adopts SFAS 157,
which will be fiscal year 2009. The Company is analyzing the
expected impact from adopting this statement on its financial
statements, but currently does not believe its adoption will
have a significant impact on the financial position or results
of operations of the Company.


 



In September 2006, the FASB issued SFAS No. 157,
Fair Value Measurements, which defines fair value,
establishes a framework for measuring fair value, and expands
disclosures about fair value measurements. Where applicable,
this Statement simplifies and codifies related guidance within
generally accepted accounting principles (GAAP). This statement
is effective for financial statements issued for fiscal years
beginning after November 15, 2007, and interim periods
within those fiscal years. The Company is currently analyzing
the expected impact from adopting this statement on its
financial statements, but currently does not believe its
adoption will have a significant impact on the financial
position or results of operations of the Company.


 



In September 2006, the FASB issued FASB Interpretation
No. 48, Accounting for Uncertainty in Income
Taxes — an Interpretation of FASB Statement
No. 109
(“FIN 48”). FIN 48
clarifies the accounting for uncertainty in income taxes
recognized in companies’ financial statements in accordance
with FASB Statement No. 109, “Accounting for Income
Taxes,” and provides guidance on financial statement
recognition and disclosure for tax positions taken or expected
to be taken on a tax return. The evaluation of a tax position in
accordance with FIN 48 is a two-step process. The first
step is recognition whereby companies must determine whether it
is more likely than not that a tax position will be sustained
upon examination. The second step is measurement whereby a tax
position that meets the more-likely-than-not recognition
threshold is measured to determine the amount of benefit to
recognize in the financial statements. FIN 48 also provides
guidance on derecognition of recognized tax benefits,
classification, interest and penalties, accounting in interim
periods, disclosure, and transition. The guidance of FIN 48
is applicable for fiscal years beginning after December 15,
2006. The Company will adopt FIN 48 at the beginning of
fiscal 2008. The Company is in the process of evaluating whether
the adoption of FIN 48 will have a material effect on the
Company’s financial position, results of operations or cash
flows.


 



In December 2007, the FASB issued SFAS 141(revised 2007),
Business Combinations (“SFAS 141R”).
SFAS 141R will significantly change the accounting for
business combinations in a number of areas including the
treatment of contingent consideration, contingencies,
acquisition costs, IPR&D and restructuring costs. In
addition, under SFAS 141R, changes in deferred tax asset
valuation allowances and acquired income tax uncertainties in a
business combination after the measurement period will impact
income tax expense. SFAS 141R is effective for fiscal years
beginning after December 15, 2008 and, as such, we will
adopt this





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standard in fiscal 2010. We have not yet determined the impact,
if any, of SFAS 141R on our consolidated financial
statements.


 



In December 2007, the FASB issued SFAS 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 (NCI) 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 fiscal
years beginning after December 15, 2008 and, as such, we
will adopt this standard in fiscal 2010. We have not yet
determined the impact, if any, of SFAS 160 on our
consolidated financial statements.


 




This excerpt taken from the UNCA 10-K filed Dec 14, 2006.
Recent Accounting Pronouncements
 
In September 2006, the SEC staff issued Staff Accounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements (SAB 108). SAB 108 was issued in order to eliminate the diversity of practice surrounding how public companies quantify financial statement misstatements.
 
There are two widely recognized methods for quantifying the effects of financial statement misstatements: the “roll-over” and “iron curtain” methods. The roll-over method, the method we historically used, focuses primarily on the impact of a misstatement on the income statement, including the reversing effect of prior year misstatements. Because the focus is on the income statement, the roll-over method can lead to the accumulation of misstatements in the balance sheet that may become material to the balance sheet. The iron curtain method focuses primarily on the effect of correcting for the accumulated misstatement as of the balance sheet date, essentially correcting the balance sheet with less emphasis on the reversing effects of prior year errors on the income statements. In SAB 108, the SEC staff established an approach that requires quantification of financial statement misstatements based on the effects of the misstatements under both the roll-over and iron curtain methods. This framework is referred to as the “dual approach.”
 
SAB 108 permits companies to initially apply its provisions either by restating prior financial statements as if the dual approach had always been used or recording the cumulative effect of initially applying the dual approach as adjustments to the balance sheet as of the first day of the fiscal year with an offsetting adjustment recorded to retained earnings. Use of the cumulative effect transition method is not permitted for otherwise immaterial misstatements that may be identified by a company and requires such immaterial misstatements to be recorded in current period earnings. We completed our analysis under the “dual approach” and have


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adopted SAB 108 as of October 1, 2005 and have applied its provisions using the cumulative effect transition method.
 
Upon adoption of SAB 108, we reversed $510,000 of excess allowance for doubtful accounts for uncorrected errors. The excess allowance for doubtful accounts as of September 30, 2003 was approximately $410,000 and had accumulated over several years. The excess allowance for doubtful accounts increased by approximately $80,000 and $20,000 during the years ended September 30, 2004 and 2005, respectively. These errors had not previously been material to any of those prior periods when measured using the roll-over method. We recorded this cumulative effect adjustment net of tax, resulting in a decrease to short-term deferred tax assets of $201,000. As a result, the net adjustment was recorded as an increase to retained earnings as of October 1, 2005 of $309,000.
 
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. Where applicable, this Statement simplifies and codifies related guidance within generally accepted accounting principles (GAAP). This statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Company is currently analyzing the expected impact from adopting this statement on its financial statements, but currently does not believe its adoption will have a significant impact on the financial position or results of operations of the Company.
 
In June 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes (FIN 48). FIN 48 requires the use of a two-step approach for recognizing and measuring tax benefits taken or expected to be taken in a tax return and disclosures regarding uncertainties in income tax positions, including a rollforward of tax benefits taken that do not qualify for financial statement recognition. The cumulative effect of initially adopting FIN 48 will be recorded as an adjustment to opening retained earnings for that year and will be presented separately. We are required to adopt FIN 48 effective October 1, 2007. Only tax positions that meet the more likely than not recognition threshold at the effective date may be recognized upon adoption of FIN 48. We are currently evaluating the impact this new standard will have on our future results of operations or financial position.
 
This excerpt taken from the UNCA 10-K filed Dec 19, 2005.
Recent Accounting Pronouncements
 
In December 2004, the Financial Accounting Standards Board, or FASB, issued SFAS 123(R), Share Based Payment. SFAS 123(R) addresses all forms of share-based payment awards, including shares issued under employee stock purchase plans, stock options, restricted stock and stock appreciation rights. SFAS 123(R) will require us to expense share-based payment awards with compensation cost for share-based payment transactions measured at fair value. SFAS 123(R) requires us to adopt the new accounting provisions beginning in the first quarter of fiscal 2006. We continue to evaluate the effect that the adoption of SFAS 123(R) will have on our financial position and results of operations. We expect that our adoption of SFAS 123(R) will adversely affect our operating results to some extent in future periods. However, uncertainties, including our future stock-based compensation strategy, stock price volatility, estimated forfeitures and employee stock option exercise behavior, make it difficult for us to determine whether the stock-based compensation expense that we will incur in future periods will be similar to the SFAS No. 123 pro forma expense disclosed in the notes to our consolidated financial statements.
 
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