MONSTER WORLDWIDE, INC. | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts)
2.
Accounting Policies (Continued)
The Company periodically enters into forward foreign exchange contracts to offset certain operational and
balance sheet exposures from changes in foreign currency exchange rates. Such exposures result from the
portion of the Company’s operations, assets and liabilities that are denominated in currencies other than the
U.S. dollar, primarily the British pound, Euro and Australian dollar. From time to time the Company also uses
forward foreign exchange contracts to offset foreign currency exposures related to upcoming acquisitions.
The contracts that relate to firm, identifiable foreign currency commitments are designated as cash flow
hedges and the gains and losses resulting from the impact of currency exchange rate movements on these
contracts are not recognized in operations until the underlying hedge transactions are recognized. Unrealized
gains and losses resulting from the impact of currency exchange rate movements on forward foreign
exchange contracts designated to offset certain non-U.S. dollar denominated assets and liabilities are
recognized as other comprehensive income (loss) and offset the foreign currency gains and losses on the
underlying exposures being hedged. Cumulative unrealized losses, which are reported as components of
accumulated other comprehensive income (loss), were $37 and $348 as of December 31, 2003 and 2002
respectively The Company does not enter into foreign currency transactions for speculative purposes.
Reclassifications
Certain reclassifications of prior year amounts have been made for consistent presentation.
Effect of Recently Issued Accounting Standards
In December 2003, the SEC published Staff Accounting Bulletin No. 104, Revenue Recognition (‘‘SAB 104’’). SAB
104 was effective upon issuance and supercedes SAB No. 101, Revenue Recognition in Financial Statements (‘‘SAB
101’’) and rescinds the accounting guidance contained in SAB 101 related to multiple-element revenue
arrangements that was superseded by Emerging Issues Task Force (‘‘EITF’’) Issue No. 00-21 (‘‘EITF 00-21’’),
Accounting for Revenue Arrangements with Multiple Deliverables. Additionally, SAB 104 rescinds portions of the
interpretive guidance included in Topic 13 of the codification of staff accounting bulletins. While the
wording of SAB 104 has changed to reflect the issuance of EITF 00-21, the revenue recognition principles of
SAB 101 have remained largely unchanged. The adoption of SAB 104 did not have a material effect on the
Company’s financial statements.
In May 2003, the Emerging Issues Task Force issued EITF 00-21, Accounting for Revenue Arrangements with Multiple
Deliverables. EITF 00-21 addresses certain aspects of the accounting by a vendor for arrangements under which
it will perform multiple revenue generating activities; specifically, how to determine whether an arrangement
involving multiple deliverables contains more than one unit of accounting and how arrangement
consideration should be measured and allocated to the separate units of accounting in the arrangement. EITF
00-21 does not change otherwise applicable revenue recognition criteria. EITF 00-21 is effective for revenue
arrangements entered into in fiscal periods beginning after June 15, 2003. The adoption of EITF 00-21 did
not have a material effect on the Company’s financial statements.
45