3M 2011 Annual Report Download - page 63

Download and view the complete annual report

Please find page 63 of the 2011 3M annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 132

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132

57
method for substantive milestones in research or development arrangements. This standard requires its provisions
be met in order for an entity to recognize consideration that is contingent upon achievement of a substantive
milestone as revenue in its entirety in the period in which the milestone is achieved. In addition, this ASU requires
disclosure of certain information with respect to arrangements that contain milestones. For 3M, this standard was
effective prospectively beginning January 1, 2011. The adoption of this standard did not have a material impact on
3M’s consolidated results of operations or financial condition.
In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement: Amendments to Achieve Common Fair
Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. This standard clarifies guidance on how
to measure fair value and is largely consistent with existing fair value measurement principles. The ASU also
expands existing disclosure requirements for fair value measurements and makes other amendments. For 3M, this
ASU is effective prospectively beginning January 1, 2012. The adoption of this standard is not expected to have a
material impact on 3M’s consolidated results of operations or financial condition.
In June 2011, the FASB issued ASU No. 2011-05, Presentation of Comprehensive Income, and in December 2011
issued ASU No. 2011-12, Deferral of the Effective Date for Amendments to the Presentation of Reclassification of
Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05. These
standards require entities to present items of net income and other comprehensive income either in a single
continuous statement, or in separate, but consecutive, statements of net income and other comprehensive income.
The new requirements do not change which components of comprehensive income are recognized in net income or
other comprehensive income, or when an item of other comprehensive income must be reclassified to net income.
Also, the earnings-per share computation does not change. However, the current option under existing standards to
report other comprehensive income and its components in the statement of changes in equity is eliminated. For 3M,
these standards are effective retrospectively beginning January 1, 2012, with early adoption permitted. 3M adopted
these standards in the fourth quarter of 2011. Since these standards impact presentation and disclosure
requirements only, their adoption did not have a material impact on 3M’s consolidated results of operations or
financial condition.
In September 2011, the FASB issued ASU No. 2011-08, Testing Goodwill for Impairment. Under this new standard,
entities testing goodwill for impairment now have an option of performing a qualitative assessment before having to
calculate the fair value of a reporting unit. If an entity determines, on the basis of qualitative factors, that the fair value
of the reporting unit is more-likely-than-not less than the carrying amount, the existing quantitative impairment test is
required. Otherwise, no further impairment testing is required. For 3M, this ASU is effective beginning January 1,
2012, with early adoption permitted under certain conditions. The adoption of this standard will not have a material
impact on 3M’s consolidated results of operations or financial condition.
In December 2011, the FASB issued ASU No. 2011-11, Disclosures About Offsetting Assets and Liabilities, which
creates new disclosure requirements regarding the nature of an entity’s rights of setoff and related arrangements
associated with its financial instruments and derivative instruments. Certain disclosures of the amounts of certain
instruments subject to enforceable master netting arrangements or similar agreements would be required,
irrespective of whether the entity has elected to offset those instruments in the statement of financial position. For
3M, the ASU is effective January 1, 2013 with retrospective application required. Since this standard impacts
disclosure requirements only, its adoption will not have a material impact on 3M’s consolidated results of operations
or financial condition.