FORM 10-K - Harman

Harman International Industries, Incorporated and Subsidiaries
(Dollars in thousands, except per-share data and unless otherwise indicated)
nonfinancial assets and liabilities will have a material effect on our financial condition or results of operations.
Nonfinancial assets and liabilities for which we have not applied the provisions of SFAS 157 primarily include
those measured at fair value in impairment testing and those initially measured at fair value in a business
combination. Refer to Note 8 – Fair Value Measurements for more information.
In 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial
Liabilities—Including an Amendment of FASB Statement No. 115” (“SFAS 159”). SFAS 159 became effective
for us on July 1, 2009. SFAS 159 permits entities to choose to measure many financial instruments and certain
other items at fair value. Entities that elect the fair value option will report unrealized gains and losses in earnings
at each subsequent reporting date. The fair value option may be elected on an instrument-by-instrument basis,
with few exceptions. SFAS 159 also establishes presentation and disclosure requirements to facilitate
comparisons between companies that choose different measurement attributes for similar assets and liabilities.
We did not elect this fair value option under SFAS 159 and as a result SFAS 159 did not have an effect on our
financial condition or results of operations, nor is it expected to have a material impact on future periods as the
election of this option for our financial instruments is expected to be, at most, limited.
In October 2008, the FASB issued FSP FAS 157-3, “Determining the Fair Value of a Financial Asset in a
Market That Is Not Active” (“FSP FAS 157-3”). FSP FAS 157-3 clarifies the application of SFAS 157 in a
market that is not active and defines additional key criteria in determining the fair value of a 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 SFAS 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 Pronouncements:
Codification: In June 2009, the FASB issued SFAS No. 168, “The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles—a replacement of FASB
Statement No. 162” (“SFAS 168”). On the effective date of this standard, FASB Accounting Standards
Codification (“Codification”) will become the source of authoritative U.S. accounting and reporting standards
for nongovernmental entities, in addition to guidance issued by the SEC. This statement is effective for financial
statements issued for interim and annual periods ending after September 15, 2009. We will adopt SFAS 168 on
July 1, 2009 and will update all disclosures to reference the Codification in our Quarterly Report on Form 10-Q
for the quarterly period ending September 30, 2009.
Variable Interest Entities: In June 2009, the FASB issued SFAS No. 167, “Amendments to FASB
Interpretation No. 46(R)” (“SFAS 167”). SFAS 167 amends Interpretation 46(R), “Consolidation of Variable
Interest Entities (revised December 2003)—an interpretation of ARB No. 51”, as it relates to the assessment of a
variable interest entity. It also requires additional disclosures to provide transparent information regarding the
involvement in a variable interest entity. SFAS 167 is effective for fiscal years and interim periods beginning
after November 15, 2009. SFAS 167 will become effective for us on July 1, 2010. We do not expect the adoption
of SFAS 167 to have a material impact on our consolidated financial statements.
Transfers of Financial Assets: In June 2009, the FASB issued SFAS No. 166, “Accounting for Transfers
of Financial Assets—an amendment of FASB Statement No. 140” (“SFAS 166”). SFAS 166 amends the
application of SFAS 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities—a replacement of FASB Statement No. 125” as it relates to the transfers of financial assets. It also
requires additional disclosures to address concerns regarding the transparency of transfers of financial assets.
SFAS 166 will become effective for us on July 1, 2010. We do not expect the adoption of SFAS 166 to have a
material impact on our consolidated financial statements.
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