ADT 2008 Annual Report Download - page 179

the first quarter of 2010. The Company is currently assessing the impact of FSP No. 142-3 on its results
of operations, financial position or cash flows.
In March 2008, the FASB issued SFAS No. 161, ‘‘Disclosures about Derivative Instruments and
Hedging Activities.’’ SFAS No. 161 is intended to improve financial reporting about derivative
instruments and hedging activities by requiring enhanced disclosures to enable investors to better
understand their effects on an entity’s results of operations, financial position or cash flows. The
disclosure provisions of SFAS No. 161 are effective for Tyco in the second quarter of 2009.
In December 2007, the FASB issued SFAS 141 (Revised 2007), ‘‘Business Combinations.’’ SFAS
No. 141R retains the underlying concepts of SFAS No. 141 in that business combinations are still
accounted for at fair value. However, the accounting for certain other aspects of business combinations
will be affected. Acquisition costs will generally be expensed as incurred. Restructuring costs associated
with a business combination will generally be expensed subsequent to the acquisition date. In-process
research and development will be recorded at fair value as an indefinite-lived intangible at the
acquisition date until it is completed or abandoned and its useful life can be determined. Changes in
deferred tax asset valuation allowances and uncertain tax positions after the acquisition date will
generally impact income tax expense. SFAS No. 141R also expands required disclosures surrounding the
nature and financial effects of business combinations. SFAS No. 141R is effective, on a prospective
basis, for Tyco in the first quarter of fiscal 2010.
In December 2007, the FASB issued SFAS No. 160, ‘‘Noncontrolling Interests in Consolidated
Financial Statements—an amendment of ARB No. 51’’. SFAS No. 160 requires the recognition of a
noncontrolling interest (minority interest prior to the adoption of SFAS 160) as equity in the
consolidated financial statements. The amount of net income attributable to the noncontrolling interest
should be included in consolidated net income on the face of the statement of income. SFAS No. 160
also amends certain of Accounting Research Bulletin No. 51’s consolidation procedures in order to
achieve consistency with the requirements of SFAS No. 141R. The statement also includes expanded
disclosure requirements regarding the interests of the parent and its noncontrolling interest. This
statement is effective for Tyco in the first quarter of fiscal 2010. The Company is currently assessing the
impact of SFAS No. 160 on its results of operations, financial position or cash flows.
In February 2007, the FASB issued SFAS No. 159, ‘‘The Fair Value Option for Financial Assets and
Financial Liabilities.’’ SFAS No. 159 permits an entity, on a contract-by-contract basis, to make an
irrevocable election to account for certain types of financial instruments and warranty and insurance
contracts at fair value, rather than historical cost, with changes in the fair value, whether realized or
unrealized, recognized in earnings. SFAS No. 159 is effective for Tyco in the first quarter of 2009. The
Company is currently assessing the impact that SFAS No. 159 will have on the results of its operations,
financial position or cash flows.
In September 2006, the FASB issued SFAS No. 157, ‘‘Fair Value Measurements,’’ which enhances
existing guidance for measuring assets and liabilities at fair value. SFAS No. 157 defines fair value,
establishes a framework for measuring fair value and expands disclosure about fair value
measurements. In February 2008, the FASB issued FASB Staff Position No. 157-1, ‘‘Application of FASB
Statement No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements That Address Fair
Value Measurements for Purposes of Lease Classification or Measurement under Statement 13’’, to exclude
SFAS No, 13, ‘‘Accounting for Leases’’ and other accounting pronouncements that address fair value
measurements for purposes of lease classification or measurement under SFAS No. 13, and FASB Staff
Position No. 157-2, ‘‘Effective Date of FASB Statement No 157’’ that permits companies to partially defer
the effective date of SFAS No. 157 for one year for nonfinancial assets and liabilities that are
recognized or disclosed at fair value in the financial statements on a nonrecurring basis. In October
2008, the FASB issued FASB Staff Position No. 157-3, ‘‘Determining the Fair Value of a Financial Asset
When the Market for That Asset Is Not Active’’, clarifies the application of SFAS No. 157 for a financial
asset in an in active market. During the first quarter of 2009 the Company elected to defer the
76 2008 Financials