Filed: March 30, 2010 (period: December 31, 2009)
Accounting for Transfers of Financial Assets
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- Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities
- Accounting for distributions to shareholders with components of stock and cash
- Amendments to FASB Interpretation No. 46 (R)
- Fair Value Measurements and Disclosures
- (b) Universal Shipping and Real Estates Inc. ("Universal")
- (c) Diana Shipping Agencies S.A. ("DSA")
- (d) 4 Sweet Dreams ("4SD")
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Accounting for Transfers of Financial Assets: In December 2009, the FASB issued ASU 2009-16, Transfers and Servicing (Topic 860) - Accounting for Transfers of Financial Assets, which formally codifies FASB Statement No. 166, Accounting for Transfers of Financial Assets into the ASC. ASU 2009-16 represents a revision to the provisions of former FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities and will require more information about transfers of financial assets, including securitization transactions, and where entities have continuing exposure to the risks related to transferred financial assets. Among other things, ASU 2009-16 (1) eliminates the concept of a "qualifying special-purpose entity", (2) changes the requirements for derecognizing financial assets, and (3) enhances information reported to users of financial statements by providing greater transparency about transfers of financial assets and an entity's continuing involvement in transferred financial assets. ASU 2009-16 will be effective for transfers of financial assets in fiscal years beginning after November 15, 2009, and in interim periods within those fiscal years with earlier adoption prohibited. The provisions of ASU 2009-16 are not expected to have a material impact on the Company's consolidated financial statements. Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities: In December 2009, the FASB issued ASU 2009-17, Consolidations (Topic 810) - Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities, which codifies FASB Statement No. 167, Amendments to FASB Interpretation No. 46(R). ASU 2009-17 represents a revision to former FASB Interpretation No. 46 (Revised December 2003), Consolidation of Variable Interest Entities, and changes how a reporting entity determines when an entity that is insufficiently capitalized or is not controlled through voting (or similar rights) should be consolidated. The determination of whether a reporting entity is required to consolidate another entity is based on, among other things, the other entity's purpose and design and the reporting entity's ability to direct the activities of the other entity that most significantly impact the other entity's economic performance. ASU 2009-17 also requires a reporting entity to provide additional disclosures about its involvement with variable interest entities and any significant changes in risk exposure due to that involvement. ASU 2009-17 is effective as of the beginning of an enterprise's first fiscal year beginning after November 15, 2009, and for interim periods within that first period. The provisions of ASU 2009-17 are not expected to have a material impact on the Company's consolidated financial statements.
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DIANA SHIPPING INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2009 (Expressed in thousands of U.S. Dollars – except share and per share data, unless otherwise stated) Accounting for distributions to shareholders with components of stock and cash: In January 2010, the FASB issued the EITF developed Accounting Standards Update (ASU) No. 2010-01. The update is applicable for annual and interim periods ending on or after December 15, 2009 and should be applied on retrospective basis. The objective of the update is to address the diversity in practise related to the accounting for distribution to shareholders that offers them the ability to elect to receive their entire distribution in cash or shares of equivalent value with a potential limitation on the total amount of cash that shareholders can elect to receive in the aggregate. The update clarifies that the stock portion of a distribution to shareholders that allows them to elect to receive cash or stock with the limit on the amount of cash that will be distributed is not a stock dividend but should be considered a share issuance that is reflected in the EPS prospectively. The Company adopted this update beginning in fiscal year 2009. The adoption of the update did not have effect on the Company's financial position or results of operations. Amendments to FASB Interpretation No. 46 (R): In June 2009 the FASB issued the statement of Financial Accounting Standards No. 167 (the "Standard"). The Standard is applicable for annual periods beginning after November 15, 2009 and for interim periods within the first annual reporting period and should be applied thereafter. The Standard amends interpretation 46(R) and identifies additional characteristics that an enterprise should analyse to determine whether its variable interests or interest give it a controlling financial interest in a variable interest entity, eliminates the quantitative approach for determining primary beneficiary of a variable interest entity and requires ongoing reassessment of whether an enterprise is the primary beneficiary of a variable interest entity. The Company has adopted the Standard beginning at its first interim period within the fiscal year 2009. The adoption of the standard did not have effect on the Company's financial position or results of operations. Fair Value Measurements and Disclosures: In January 2010, the FASB issued the Accounting Standards Update (ASU) No. 2010-06. The update is applicable for annual and interim periods ending on or after December 15, 2009 with the exception of certain provisions relating with disclosures in roll forward of activity in Level 3 fair value measurements. The objective of the update is to improve the disclosures about fair value measurements on the basis of input received by the users of financial statements. The update requires disclosures for transfers in and out of Level 1 and Level 2 fair value measurements and description for the reason for transfer, for inputs and valuation techniques for fair value measurements that fall in either Level 2 or Level 3 and for the level of disaggregation. The Company adopted this update beginning in fiscal year 2009. The adoption of the update did not have a material effect on the Company's financial position or results of operations. Subsequent Events: In February 2010, the FASB issued ASU 2010-09, Subsequent Events (Topic 855). ASU 2010-09 amends ASC 855 to clarify which entities are required to evaluate subsequent events through the date the financial statements are issued and the scope of the disclosure requirements related to subsequent events. The amendments remove the requirement for an SEC filer to disclose the date through which management evaluated subsequent events in both issued and revised financial statements. Revised financial statements include financial statements revised as a result of either correction of an error or retrospective application of U.S. GAAP. Additionally, the FASB has clarified that if the financial statements have been revised, then an entity that is not an SEC filer should disclose both the date that the financial statements were issued or available to be issued and the date the revised financial statements were issued or available to be issued. Those amendments remove potential conflicts with the SEC's literature. All of the amendments in this Update are effective upon its issuance, except for the use of the issued date for conduit debt obligors. That amendment is effective for interim or annual periods ending after June 15, 2010. The adoption of the above amendments of ASU 2010-09 did not have a material impact on the Company's consolidated financial statements.
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DIANA SHIPPING INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2009 (Expressed in thousands of U.S. Dollars – except share and per share data, unless otherwise stated)
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DIANA SHIPPING INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2009 (Expressed in thousands of U.S. Dollars – except share and per share data, unless otherwise stated)
The amounts in the accompanying consolidated balance sheets include payments to sellers of vessels or, in the case of vessels under construction, to the shipyards and other costs as analyzed below:
The movement of the account, during December 31, 2009 and 2008 was as follows:
On September 13, 2006, the Company entered into agreements with unrelated third parties to assume two shipbuilding contracts with China Shipbuilding Trading Company, Limited and Shanghai Waigaoqiao Shipbuilding Co., Ltd (the "shipbuilders") dated March 30, 2006 for the construction of two 177,000 dwt Capesize dry bulk carriers, Hull No. H1107 and H1108, for the price of $60,200 each and with scheduled deliveries in the first and second quarter of 2010, respectively. On April 13, 2009, the Company entered into agreements with the shipbuilders, Shanghai Jiangnan-Changxing Shipbuilding Co. Ltd., and with a single purpose company, Gala Properties Inc. ("Gala"), a related party controlled by the two daughters of the Company's Chairman and Chief Executive Officer under which the Company:
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DIANA SHIPPING INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2009 (Expressed in thousands of U.S. Dollars – except share and per share data, unless otherwise stated)
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