Starbucks 2006 Annual Report Download - page 40

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and reporting for uncertainty in income tax positions. This Interpretation prescribes a comprehensive model for the
financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to
be taken in income tax returns. FIN 48 is effective for fiscal years beginning after December 15, 2006 and the Company
will adopt the new requirements in its fiscal first quarter of 2008. The cumulative effects, if any, of adopting FIN 48 will
be recorded as an adjustment to retained earnings as of the beginning of the period of adoption. The Company has not yet
determined the impact, if any, of adopting FIN 48 on its consolidated financial statements.
In September 2006, the FASB issued SFAS 157, “Fair Value Measurements” (“SFAS 157”), which defines fair value,
establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements.
SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim
periods within those fiscal years. Early adoption is permitted. Starbucks must adopt these new requirements no later than
its first fiscal quarter of 2009. Starbucks has not yet determined the effect on the Company’s consolidated financial
statements, if any, upon adoption of SFAS 157, or if it will adopt the requirements prior to the first fiscal quarter of 2009.
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”). The intent of
SAB 108 is to reduce diversity in practice for the method companies use to quantify financial statement misstatements,
including the effect of prior year uncorrected errors. SAB 108 establishes an approach that requires quantification of
financial statement errors using both an income statement and a cumulative balance sheet approach. SAB 108 is effective
for fiscal years beginning after November 15, 2006, and the Company will adopt the new requirements in fiscal 2008.
The adoption of SAB 108 is not currently expected to have a significant impact on the Company’s consolidated financial
statements.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
The information required by this item is incorporated by reference to the section entitled “Management’s Discussion and
Analysis of Financial Condition and Results of Operations — Commodity Prices, Availability and General Risk
Conditions” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial
Risk Management” in Item 7 of this Report.
36 STARBUCKS CORPORATION, FORM 10-K