ADT 2008 Annual Report Download - page 212

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation and Summary of Significant Accounting Policies (Continued)
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’’, which clarifies the application of SFAS No. 157 for a
financial asset in an active market. During the first quarter of 2009 the Company elected to defer the
adoption 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. SFAS No. 157 is effective for
Tyco in the first quarter of 2009. The Company is currently assessing the impact, if any, that SFAS
No. 157 will have on the results of its operations, financial position or cash flows.
In September 2006, FASB issued SFAS No. 158, ‘‘Employers’ Accounting for Defined Benefit Pension
and Other Postretirement Plans—an amendment of FASB Statements No. 87, 88, 106 and 132(R).’’ SFAS
No. 158 requires that employers recognize the funded status of defined benefit pension and other
postretirement benefit plans as a net asset or liability on the balance sheet and recognize as a
component of other comprehensive income, net of tax, the gains or losses and prior service costs or
credits that arise during the period but are not recognized as a component of net periodic benefit cost.
The company adopted the recognition and disclosure provisions of SFAS No. 158 as of September 28,
2007.
SFAS No. 158 also requires companies to measure plan assets and benefit obligations as of their
fiscal year end. The Company presently uses a measurement date of August 31st. The measurement
date provisions become effective in fiscal 2009. The Company is currently assessing the impact that
SFAS No. 158 measurement date provisions will have on the results of its operations, financial position
or cash flows.
2008 Financials 109