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This excerpt taken from the VLG 10-K filed Sep 28, 2006. New
Accounting Standards
In November 2004, the FASB issued SFAS No. 151 that
requires that items such as idle facility expense, excessive
spoilage, double freight and handling costs be recognized as
current period charges. In addition, it requires that the
allocation of fixed production overheads to the costs of
conversion be based on the normal capacity of the production
facilities. The standard was effective July 1, 2005 and no
current period charges were required to be recognized.
In December 2004, the FASB issued Staff Position (FSP)
No. 109-1
providing guidance on accounting for the manufacturing tax
deduction provided for in the American Jobs Creation Act of
2004. The staff position calls for the tax deduction to be
accounted for as a special deduction, beginning with our 2006
tax year. The adoption of this position did not materially
affect our effective tax rate.
In February 2005, the FASB issued Emerging Issues Task Force
(EITF) No.
04-10,
“Determining Whether to Aggregate Segments That Do Not Meet
the Quantitative Thresholds.” This statement clarifies the
aggregation criteria of operating segments as defined in
SFAS No. 131. This statement was effective for fiscal
years ending after September 15, 2005. This statement
resulted in Valley reporting four reportable segments for the
year ended June 30, 2006. (See Note 15).
Table of Contents
In May 2005, the FASB issued Statement of Financial Accounting
Standards No. 154, “Accounting Changes and Error
Corrections.” This statement replaces APB 20
cumulative effect accounting with retroactive restatement of
comparative financial statements. It applies to all voluntary
changes in accounting principle and defines “retrospective
application” to differentiate it from restatements due to
incorrect accounting. The provisions of this statement are
effective for accounting changes and corrections of errors made
in fiscal years beginning after December 15, 2005 and will
become effective for Valley for the fiscal year ended
June 30, 2007.
In June 2006, the Financial Accounting Standards Board (FASB)
issued FASB Interpretation No. 48, “Accounting for
Uncertainty in Income Taxes — an Interpretation of
FASB Statement No. 109” (FIN 48). FIN 48
prescribes a method of recognition, measurement, presentation
and disclosure within the financial statements for uncertain tax
positions that a company has taken or expects to take in a tax
return. FIN 48 is effective for Valley on July 1,
2007. We are in the process of evaluating the provisions of
FIN 48 to determine if there will be any impact of adoption
on our results of operations or financial condition.
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