Nike 2009 Annual Report Download - page 45

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financial asset when the market for that financial asset is not active. FSP FAS 157-3 applies to financial assets
within the scope of accounting pronouncements that require or permit fair value measurements in accordance
with FAS 157. FSP FAS 157-3 was effective upon issuance and the application of FSP FAS 157-3 did not have a
material impact on our consolidated financial statements.
Recently Issued Accounting Standards
In May 2009, the FASB issued SFAS No. 165, “Subsequent Events” (“FAS 165”), which establishes
general standards of accounting and disclosure for events that occur after the balance sheet date but before
financial statements are issued. The provisions of FAS 165 are effective for the quarter ending August 31, 2009.
We do not expect the adoption will have a material impact on our consolidated financial position or results of
operations.
In April 2009, the FASB issued Staff Position No. FAS 107-1 and APB 28-1, “Interim Disclosures about
Fair Value of Financial Instruments” (“FSP FAS 107-1 and APB 28-1”), which amends SFAS No. 107,
“Disclosures about Fair Value of Financial Instruments”, and APB Opinion No. 28, “Interim Financial
Reporting,” to require disclosures about fair value of financial instruments in interim and annual reporting
periods. The provisions of FSP FAS 107-1 and APB 28-1 are effective for the quarter ending August 31, 2009.
We do not expect the adoption will have an impact on our consolidated financial position or results of operations.
In December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations” (“FAS
141(R)”) and SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements” (“FAS 160”).
These standards aim to improve, simplify, and converge international standards of accounting for business
combinations and the reporting of noncontrolling interests in consolidated financial statements. The provisions of
FAS 141(R) are effective for business combinations for which the acquisition date is on or after June 1, 2009.
Generally, the effects of FAS 141(R) will depend on future acquisitions. The provisions of FAS No. 160 are
effective for the Company beginning June 1, 2009. We do not expect that the adoption of FAS 160 will have a
material impact on the Company’s consolidated financial position or results of operations.
In April 2008, the FASB issued Staff Position No. FAS 142-3, “Determination of the Useful Life of
Intangible Assets” (“FSP FAS 142-3”). FSP FAS 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.” The intent of the position is to improve the
consistency between the useful life of a recognized intangible asset under SFAS No. 142 and the period of
expected cash flows used to measure the fair value of the asset under FAS 141(R), and other U.S. generally
accepted accounting principles. The provisions of FSP FAS 142-3 are effective for the fiscal year beginning
June 1, 2009. We do not expect the adoption of FSP FAS 142-3 will have a material impact on our consolidated
financial position or results of operations.
Critical Accounting Policies
Our previous discussion and analysis of our financial condition and results of operations are based upon our
consolidated financial statements, which have been prepared in accordance with accounting principles generally
accepted in the United States of America. The preparation of these financial statements requires us to make
estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related
disclosure of contingent assets and liabilities.
We believe that the estimates, assumptions and judgments involved in the accounting policies described
below have the greatest potential impact on our financial statements, so we consider these to be our critical
accounting policies. Because of the uncertainty inherent in these matters, actual results could differ from the
estimates we use in applying the critical accounting policies. Certain of these critical accounting policies affect
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