Cabela's 2004 Annual Report Download - page 63

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Impact of Recent Accounting Pronouncements
At the March 17-18, 2004 EITF meeting the Task Force reached a consensus on Issue No. 03-1. The
Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments. Issue 03-1
provides guidance for determining when an investment is other-than-temporarily impaired that is
incremental to the consideration in this Issue- speciÑcally, whether an investor has the ability and intent to
hold an investment until recovery. In addition, Issue 03-1 contains disclosure requirements that provide
useful information about impairments that have not been recognized as other than temporary for
investments within the scope of this Issue. The guidance for evaluating whether an investment is other-
than-temporarily impaired should be applied in other-than-temporary impairment evaluations made in
reporting periods beginning after June 15, 2004. The disclosures are eÅective in annual Ñnancial statements
for Ñscal years ending after December 15, 2003, for investments accounted for under SFAS No. 115
Accounting for Certain Investments in Debt and Equity Securities. For other investments within the scope
of this Issue, the disclosures are eÅective in annual Ñnancial statements for Ñscal years ending after
June 15, 2004. The additional disclosure for cost method investments are eÅective for Ñscal years ending
after June 15, 2004. Comparative information for periods prior to initial application is not required. The
adoption of this Issue did not have a material impact on the Company's Ñnancial position, results of
operations or cash Öows. In September 2004, the FASB issued StaÅ Position 03-1-1 which deferred the
eÅective date for the measurement and recognition guidance contained in paragraphs 10-20 of Issue 03-1.
This delay does not suspend the requirement to recognize other-than-temporary impairments as required
by existing authoritative literature. The delay of the eÅective date for paragraphs 10-20 of Issue 03-1 will
be superseded concurrent with the Ñnal issuance of FSB EITF Issue 03-1a.
On December 16, 2004, the FASB issued Statement No. 153 Exchanges of Nonmonetary Assets, an
amendment of APB Opinion No. 29. This statement was a result of an eÅort by the FASB and the IASB
to improve Ñnancial reporting by eliminating certain narrow diÅerences between their existing accounting
standards. One such diÅerence was the exception from fair value measurement in APB Opinion No. 29,
Accounting for Nonmonetary Transactions, for nonmonetary exchanges of similar productive assets.
Statement 153 replaces this exception with a general exception from fair value measurement for exchanges
of nonmonetary assets that do not have commercial substance. A nonmonetary exchange has commercial
substance if the future cash Öows of the entity are expected to change signiÑcantly as a result of the
exchange. This statement shall be applied prospectively and is eÅective for nonmonetary asset exchanges
occurring in Ñscal periods beginning after June 15, 2005. Earlier application is permitted for nonmonetary
asset exchanges occurring in Ñscal periods beginning after the date of issuance of this Statement. The
adoption of FASB No. 153 will not have a signiÑcant impact on the Company's Ñnancial position, results
of operations or cash Öows.
On December 16, 2004, the FASB issued Statement No. 123 (revised 2004), Share-Based Payment.
Statement 123(R) requires all entities to recognize compensation expense in an amount equal to the fair
value of the share-based payments (e.g., stock options and restricted stock) granted to employees or by
incurring liabilities to an employee or other supplier (a) in amounts based, at least in part, on the price of
the entity's shares or other equity instruments or (b) that require or may require settlement by issuing the
entity's equity shares or other equity instruments. This Statement is a revision of FASB Statement
No. 123, Accounting for Stock-Based Compensation. This Statement supersedes APB Opinion No. 25,
Accounting for Stock Issued to Employees, and its related implementation guidance. This Statement is
eÅective for public entities that do not Ñle as small business issuers as of the beginning of the Ñrst interim
or annual reporting period that begins after June 15, 2005. The Company will adopt this statement at its
eÅective date in the third Ñscal quarter of 2005. The Company expects to record pre-tax expense on
unvested options of approximately $2.0 to $3.0 million during the second half of 2005 after this statement
is adopted.
51