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| TBUS > SEC Filings for TBUS > Form 10-Q on 16-Nov-2009 | All Recent SEC Filings |
16-Nov-2009
Quarterly Report
† Inventory valuation;
† Warranty reserve;
† Intangible assets and goodwill;
† Income taxes, including deferred tax assets;
† Revenue recognition; and
† Stock-based compensation.
The financial statements include amounts that are based on management's best
estimates and judgments. The most significant estimates relate to allowance for
uncollectible accounts receivable, inventory obsolescence, depreciation,
intangible asset valuations and useful lives, goodwill impairment, warranty
costs, income taxes, stock-based compensation, and revenue on projects with
multiple deliverables. These estimates may be adjusted as more current
information becomes available, and any adjustment could be significant.
The Company believes there were no significant changes during the nine-month
period ended September 30, 2009 to the items disclosed as critical accounting
policies and estimates in Management's Discussion and Analysis of Financial
Condition and Results of Operations in the 2008 Annual Report.
Recent Accounting Pronouncements
In June 2009, the Financial Accounting Standards Board ("FASB") issued
Accounting Standards Codification ("ASC") Topic 105, "Generally Accepted
Accounting Principles", (formerly referred to as SFAS No. 168, "The FASB
Accounting Standards Codification and the Hierarchy of Generally Accepted
Accounting Principles"). ASC Topic 105 establishes the ASC as the source of
authoritative principles recognized by the FASB to be applied by nongovernmental
entities in the preparation of financial statements in conformity with generally
accepted accounting principles ("GAAP"). Rules and interpretive releases of the
SEC under authority of federal securities laws are also sources of authoritative
GAAP for SEC registrants. ASC Topic 105 is effective for financial statements
issued for interim and annual periods ending after September 15, 2009. The
adoption of ASC Topic 105 did not have a material impact on our consolidated
financial statements for the three and nine months ended September 30, 2009.
On February 12, 2008, the FASB issued ASC Topic 820-10-15, "Fair Value
Measurements and Disclosures", (formerly referred to as FASB Staff Position
("FSP") No. FAS 157-2, "Effective date of FASB Statement No. 157"), which
delayed the effective date of ASC Topic 820-10, (formerly referred to as SFAS
No. 157), for all nonfinancial assets and nonfinancial liabilities, except those
that are recognized or disclosed at fair value in the financial statements on at
least an annual basis, until 2009. The Company adopted the provisions of ASC
Topic 820-10 for nonfinancial assets and nonfinancial liabilities effective
January 1, 2009. The adoption of ASC Topic 820-10 with respect to nonfinancial
assets and nonfinancial liabilities did not have a significant impact on our
results of operations or financial condition.
In December 2007, the FASB issued ASC Topic 805-10, "Business Combinations",
(formerly referred to as SFAS No. 141(R)). ASC Topic 805-10 retains the
underlying concepts of prior guidance in that all business combinations are
still required to be accounted for at fair value under the acquisition method of
accounting; but ASC Topic 805-10 changed the method of applying the acquisition
method in a number of significant aspects. ASC Topic 805-10 requires companies
to recognize, with certain exception, 100% of the fair value of the assets
acquired, liabilities assumed and non-controlling interest in acquisitions of
less than 100% controlling interest when the acquisition constitutes a change in
control; measure acquirer shares issued as consideration for a business
combination at fair value on the date of the acquisition; recognize contingent
consideration arrangements at their acquisition date fair value, with subsequent
change in fair value generally reflected in earnings; recognition of
reacquisition loss and gain contingencies at their acquisition date fair value;
and expense, as incurred, acquisition related transaction costs. We adopted the
provisions of ASC Topic 805-10 effective January 1, 2009 and accounted for the
acquisition of the remaining 50% interest in Mobitec Brazil Ltda under the
provisions of ASC Topic 805-10 (see Note 2 to the accompanying consolidated
financial statements for further discussion of this acquisition).
In December 2007, the FASB issued ASC Topic 810-10-65, "Consolidation",
(formerly referred to as SFAS No. 160, "Noncontrolling Interests in Consolidated
Financial Statements, an Amendment of ARB 51"). ASC Topic 810-10-65 establishes
new standards that govern the accounting for and reporting of (1) noncontrolling
interest in partially-owned consolidated subsidiaries and (2) loss of control of
subsidiaries. ASC Topic 810-10-65 requires that entities provide sufficient
disclosures that clearly identify and distinguish between the interests of the
parent and the interest of the noncontrolling owners separately within the
consolidated statement of position within equity, but separate from the parent's
equity and separately on the face of the consolidated income statement. Further,
changes in a parent's ownership interest while the parent retains its
controlling financial interest in its subsidiary should be accounted for
consistently and when a subsidiary is deconsolidated, any retained
noncontrolling equity investment in the former subsidiary should be initially
measured at fair value. We adopted the provisions of ASC Topic 810-10-65
effective January 1, 2009 and accounted for the acquisition of the remaining 50%
interest in Mobitec Brazil Ltda under the provisions of ASC Topic 810-10-65 (see
Note 2 to the accompanying consolidated financial statements for further
discussion of this acquisition). The adoption of ASC Topic 810-10-65 impacted
the accompanying consolidated financial statements for all periods presented as
follows:
• The noncontrolling interests in Mobitec Brazil Ltda and Castmaster Mobitec
India Private Limited have been reclassified to shareholders' equity.
• Consolidated net income (loss) has been adjusted to include the net income
(loss) attributed to the noncontrolling interest in Mobitec Brazil Ltda and
Castmaster Mobitec India Private Limited.
• Consolidated comprehensive income (loss) has been adjusted to include the comprehensive income (loss) attributed to the noncontrolling interest in Mobitec Brazil Ltda and Castmaster Mobitec India Private Limited.
• We have disclosed for each reporting period the amounts of consolidated income
(loss) attributed to the Company and the noncontrolling interest in Mobitec
Brazil Ltda and Castmaster Mobitec India Private Limited. In addition, for
each reporting period we have presented a reconciliation at the beginning and
end of the period of the carrying amount of equity attributable to the Company
and noncontrolling interest in Mobitec Brazil Ltda and Castmaster Mobitec
India Private Limited.
In March 2008, the FASB issued ASC Topic 815-10, "Derivatives and Hedging", (formerly referred to as SFAS No. 161 "Disclosures about Derivative Instruments and Hedging Activities, an Amendment of FASB Statement No. 133"), which is effective on a prospective basis for fiscal years and interim periods beginning after November 15, 2008. ASC Topic 815-10 is intended to
improve financial reporting about derivative instruments and hedging activities
by requiring enhanced disclosures to enable investors to better understand such
effects on financial position, financial performance and cash flow. We adopted
the provisions of ASC Topic 815-10 effective January 1, 2009. The adoption of
ASC Topic 815-10 did not have a material impact on our results of operations or
financial condition.
In April 2008, the FASB issued ASC Topic 350-30-65, "Intangibles-Goodwill and
Other", (formerly referred to as FSP FAS 142-3,"Determination of the Useful Life
of Intangible Assets") ASC Topic 350-30-65 amends the factors that should be
considered in developing renewal or extension assumptions used to determine the
useful life of a recognized intangible asset. ASC Topic 350-30-65 is effective
for fiscal years beginning after December 15, 2008. We adopted the provisions of
ASC Topic 350-30-65 effective January 1, 2009. The adoption of ASC Topic
350-30-65 did not have a material impact on our results of operations or
financial condition.
In June 2008, the FASB issued ASC Topic 815-40, "Derivatives and Hedging:
Contracts in Entity's Own Equity", (formerly referred to as Emerging Issues Task
Force ("EITF") Issue No. 07-5, "Determining Whether an Instrument (or Embedded
Feature) Is Indexed to an Entity's Own Stock"). ASC Topic 815-40 clarifies the
determination of whether an instrument (or an embedded feature) is indexed to an
entity's own stock, which would qualify as a scope exception under ASC Topic
815-10-15 (formerly referred to as SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities"). ASC Topic 815-40 is effective for
financial statements issued for fiscal years beginning after December 15, 2008.
In conjunction with a loan agreement pursuant to which a $5.0 million term loan
was obtained in June 2008, the Company issued the lender warrants to purchase up
to 350,000 shares of our Common Stock. These warrants were determined to be a
derivative instrument based on the clarification within ASC Topic 815-40. As of
January 1, 2009, the fair value of these warrants was reclassified from equity
to a current liability and a cumulative effect adjustment to retained earnings
was recorded for the change in the fair value of the warrants. During the period
in which the warrants are classified as a liability, the fair value of the
warrants will be periodically remeasured with any changes in value recognized in
other income (loss) in the consolidated financial statements. See the "Fair
Value of Assets and Liabilities" section of Note 1 to the accompanying
consolidated financial statements for further discussion of accounting treatment
of these warrants.
In May 2009, the FASB issued ASC Topic 855-10, "Subsequent Events", (formerly
referred to as SFAS No. 165, "Subsequent Events"). ASC Topic 855-10 establishes
general standards of accounting for and disclosure of events that occur after
the balance sheet date but before financial statements are issued or are
available to be issued. ASC Topic 855-10 is effective for interim or annual
financial periods ending after June 15, 2009. The adoption of ASC Topic 855-10
did not have an impact on our consolidated financial statements for the three
and nine months ended September 30, 2009, as it is our continuing policy to
evaluate subsequent events through the date our financial statements are issued.
For the quarterly period ended September 30, 2009, we have evaluated subsequent
events through November 16, 2009, which is the date our financial statements
were issued and filed with the SEC.
In April 2009, the FASB issued ASC Topic 825-10-65, "Financial Instruments",
(formerly referred to as FSP FAS 107-1 and APB 28-1, "Interim Disclosures about
Fair Value of Financial Instruments.") ASC Topic 825-10-65 enhances consistency
in financial reporting by increasing the frequency of fair value disclosures.
ASC Topic 825-10-65 relates to fair value disclosures for any financial
instruments that are not currently reflected on a company's balance sheet at
fair value. ASC Topic 825-10-65 requires these disclosures on a quarterly basis,
providing qualitative and quantitative information about fair value estimates
for all those financial instruments not measured on the balance sheet at fair
value. The disclosure requirement under ASC Topic 825-10-65 was effective for
the Company beginning with the interim reporting period ended June 30, 2009.
In September 2009, the FASB issued Accounting Standards Update ("ASU")
2009-06, "Implementation Guidance on Accounting for Uncertainty in Income Taxes
and Disclosure Amendments for Nonpublic Entities". ASU 2009-06 provides
additional implementation guidance on accounting for uncertainty in income taxes
and eliminates the disclosures required by paragraph ASC Topic 740-10-50-15(a)
through (b) for nonpublic entities. The Company believes the adoption of ASU
2009-09 will not have a material impact on its consolidated financial
statements.
In October 2009, the FASB issued ASU 2009-13, which amends ASC Topic 605,
"Revenue Recognition", to require companies to allocate the overall
consideration in multiple-element arrangements to each deliverable by using a
best estimate of the selling price of individual deliverables in the arrangement
in the absence of vendor-specific objective evidence or other third-party
evidence of the selling price. ASU 2009-13 will be effective prospectively for
revenue arrangements entered into or materially modified in fiscal years
beginning on or after June 15, 2010 and early adoption will be permitted. The
Company is in the process of determining the effect, if any, the adoption of ASU
2009-13 will have on its consolidated financial statements.
In October 2009, the FASB issued ASU 2009-14, which amends ASC Topic 985-605,
"Software-Revenue Recognition", to exclude from its requirements
(a) non-software components of tangible products and (b) software components of
tangible products that are sold, licensed, or leased with tangible products when
the software components and non-software components of the tangible product
function together to deliver the tangible product's essential functionality. ASU
2009-14 will be effective prospectively for revenue arrangements entered into or
materially modified in fiscal years beginning on or after June 15, 2010 and
early adoption will be permitted. The Company is in the process of determining
the effect, if any, the adoption of ASU 2009-14 will have on its consolidated
financial statements.
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