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to Continue as a Going Concern (ASU 2014-15), which provides guidance on management’s responsibility in
evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and to
provide related footnote disclosures. ASU 2014-15 will be effective in the fourth quarter of 2016, with early
adoption permitted. The Company is currently evaluating the impact of its pending adoption of ASU 2014-15 on
its consolidated financial statements.
Share-Based Payments with Performance Targets. In June 2014, the FASB issued Accounting Standards
Update No. 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a
Performance Target Could Be Achieved after the Requisite Service Period (ASU 2014-12), which requires that a
performance target be treated as a performance condition if it affects vesting and could be achieved after the
requisite service period is rendered. ASU 2014-12 will be effective in the first quarter of 2016, with early
adoption permitted. The Company may use either of two methods: (i) prospective application to all awards
granted or modified after the effective date or (ii) retrospective application to all awards with performance targets
that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to
all new or modified awards thereafter, with the cumulative effect of applying ASU 2014-12 as an adjustment to
the opening retained earnings balance as of the beginning of the earliest annual period presented in the financial
statements. The Company is currently evaluating the impact of its pending adoption of ASU 2014-12 on its
consolidated financial statements and has not yet determined which method it will apply.
Revenue Recognition. In May 2014, the FASB issued Accounting Standards Update No. 2014-09,
Revenue from Contracts with Customers: Topic 606 (ASU 2014-09), which creates a single source of revenue
guidance under U.S. GAAP for all companies in all industries. The core principle of ASU 2014-09 is that
revenue should be recognized in a manner that depicts the transfer of promised goods or services to customers in
an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or
services. ASU 2014-09 defines a five-step process in order to achieve this core principle, which may require the
use of judgment and estimates. ASU 2014-09 also requires expanded qualitative and quantitative disclosures
relating to the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with
customers, including significant judgments and estimates used. ASU 2014-09 will be effective for the Company
in the first quarter of 2017 and early adoption is not permitted. The Company may adopt ASU 2014-09 either by
using a full retrospective approach for all periods presented in the period of adoption or a modified retrospective
approach. The Company is currently evaluating the impact of its pending adoption of ASU 2014-09 on its
consolidated financial statements and has not yet determined which approach it will apply.
NOTE 3: GLOBALFOUNDRIES
Formation and Accounting
On March 2, 2009, the Company consummated the transactions contemplated by the Master Transaction
Agreement among the Company, Advanced Technology Investment Company LLC (currently known as
Mubadala Technology Investments LLC (Mubadala Tech)) and West Coast Hitech L.P. (WCH), pursuant to
which the Company formed GLOBALFOUNDRIES Inc. (GF). In connection with the consummation of the
transactions contemplated by the Master Transaction Agreement, the Company, Mubadala Tech and GF entered
into a Wafer Supply Agreement (the WSA), a Funding Agreement (the Funding Agreement) and a Shareholders’
Agreement (the Shareholders’ Agreement) on March 2, 2009.
At GF’s formation on March 2, 2009 and through December 26, 2009, GF was deemed a variable-interest
entity, and the Company was deemed to be GF’s primary beneficiary. Accordingly, the Company consolidated
GF under applicable accounting rules. As a result of certain GF governance changes, the Company
deconsolidated GF and accounted for its GF ownership under the equity method of accounting as of
December 27, 2009. Following the deconsolidation, GF became the Company’s related party.
In the first quarter of 2011, as a result of a contribution to GF by an affiliate of Mubadala Tech and certain
GF governance changes noted above, the Company’s ownership in GF was diluted, and the Company concluded
that it no longer had the ability to exercise significant influence over GF. Accordingly, the Company changed the
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