Yahoo 2008 Annual Report Download - page 75

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Yahoo! Inc.
Notes to Consolidated Financial Statements—(Continued)
other income, net on the consolidated statements of income. The Company recorded approximately $5 million
and $7 million of net gains in 2006 and 2007, respectively, and $25 million of net losses in 2008.
Recent Accounting Pronouncements
In December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations” (“SFAS 141R”),
and SFAS No. 160, “Accounting and Reporting of Non-controlling Interest in Consolidated Financial
Statements, an amendment of ARB 51” (“SFAS 160”), which will change the accounting for and reporting of
business combination transactions and noncontrolling interests in consolidated financial statements. The
provisions of SFAS 141R and SFAS 160 were effective for the Company on January 1, 2009. SFAS 141R had no
impact on previously recorded acquisitions. SFAS 160 requires changes in classification and presentation of
minority interests in the consolidated balance sheets, statements of income, and statements of stockholders’
equity.
In February 2008, the FASB issued FASB Staff Position (“FSP”) No. FAS 157-2, “Effective Date of FASB
Statement No. 157” (“FSP FAS 157-2”), which delays the effective date of SFAS No. 157, “Fair Value
Measurements” (“SFAS 157”) for all non-financial assets and non-financial liabilities, except those that are
recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually) for fiscal
years beginning after November 15, 2008, and interim periods within those fiscal years for items within the
scope of this FSP. The adoption of FSP FAS 157-2 is not expected to have a material impact on the Company’s
consolidated financial position, cash flows, or results of operations.
In April 2008, the FASB issued FSP No. FAS 142-3, “Determination of the Useful Life of Intangible Assets”
(“FSP FAS 142-3”), to improve the consistency between the useful life of a recognized intangible asset under
SFAS 142 and the period of expected cash flows used to measure the fair value of the asset under
SFAS No. 141R. The provisions of FSP FAS 142-3 were effective for the Company on January 1, 2009 and are
not expected to have a material impact on the Company’s consolidated financial position, cash flows, or results
of operations.
In May 2008, the FASB issued FSP Accounting Principles Board Opinion (“APB”) No. 14-1, “Accounting for
Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash
Settlement)” (“FSP APB 14-1”), which requires the issuer of certain convertible debt instruments that may be
settled in cash (or other assets) on conversion to separately account for the liability (debt) and equity (conversion
option) components of the instrument in a manner that reflects the issuer’s nonconvertible debt borrowing rate.
FSP APB 14-1 became effective for the Company on January 1, 2009 and requires retroactive application. The
effect of applying FSP APB 14-1 on the Company’s debt is expected to reduce net income for the years ended
December 31, 2006, 2007, and 2008 by $20 million, $21 million, and $5 million, respectively.
In June 2008, the FASB issued FSP No. EITF 03-6-1, “Determining Whether Instruments Granted in Share-
Based Payment Transactions Are Participating Securities” (“FSP EITF 03-6-1”), which requires entities to apply
the two-class method of computing basic and diluted earnings per share for participating securities that include
awards that accrue cash dividends (whether paid or unpaid) any time common shareholders receive dividends and
those dividends do not need to be returned to the entity if the employee forfeits the award. FSP EITF 03-6-1
became effective for the Company on January 1, 2009 and requires retroactive application. The Company
determined that restricted stock units issued from the Amended and Restated 1996 Directors’ Stock Plan (the
“Directors’ Plan”) and restricted stock awards issued from the Company’s Amended and Restated 1995 Stock
Plan (the “1995 Plan”) carry unforfeitable dividend rights. The Company has further evaluated the impact of this
standard and anticipates that its retroactive application (which contemplates the impact of FSP APB 14-1 as
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