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(a) During the third quarter of fiscal
2003, the Securities and Exchange Commission staff indicated the guidance
in Emerging Issues Task Force (EITF) Issue No. 01-09, "Accounting for
Consideration Given by a Vendor to a Customer (Including a Reseller of the
Vendor's Products)" should be applied broadly to all forms of
consideration in which an entity pays cash or other forms of consideration
to its customers. The Company
acquires Information Technology assets from outsourcing clients and
subsequently records the assets at their fair values. Any excess paid over the fair value
amounts (premium) is included in outsourcing contract costs and amortized
over the contract life. In
accordance with EITF Issue No. 01-09, amortization of premiums have been
treated as a reduction of revenue, rather than amortization expense. Prior period amounts have been conformed
with current year presentation. The
revenues and total costs and expenses were both reduced by less than 1%,
with no impact on income.
(b) During the third quarter of fiscal 2003,
the Company reclassified the provision for bad debt expense from costs of
services to selling, general and administrative. Prior period amounts have been conformed to current year
presentation.
(c) The Company adopted Statement of Financial Accounting Standards (SFAS)
No. 142, "Goodwill and Other Intangible Assets" effective March
30, 2002. One of the SFAS No. 142
requirements is that, upon adoption of the new standard, goodwill and
certain intangible assets must no longer be amortized. Goodwill and employee workforce acquired
amortization of $19.5 million
($18.7 million after tax), or 11 cents per share (diluted) was recorded
during the third quarter ended December 28, 2001.
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