APS 2011 Annual Report Download - page 118

PINNACLE WEST CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
93
Cash and Cash Equivalents
We consider all highly liquid investments with a remaining maturity of three months or less at
acquisition to be cash equivalents.
Intangible Assets
We have no goodwill recorded and have separately disclosed other intangible assets, primarily
APS’s software, on Pinnacle West’s Consolidated Balance Sheets. The intangible assets are amortized
over their finite useful lives. Amortization expense was $47 million in 2011, $45 million in 2010, and
$35 million in 2009. Estimated amortization expense on existing intangible assets over the next five
years is $42 million in 2012, $35 million in 2013, $28 million in 2014, $21 million in 2015, and $13
million in 2016. At December 31, 2011, the weighted average remaining amortization period for
intangible assets was 7 years.
Investments
El Dorado accounts for its investments using either the equity method (if significant influence)
or the cost method (if less than 20% ownership).
Our investments in the nuclear decommissioning trust fund are accounted for in accordance
with guidance on accounting for certain investments in debt and equity securities. See Note 14 and
Note 23 for more information on these investments.
2. New Accounting Standards
In May 2011, the FASB issued amended guidance to converge fair value measurement and
disclosure requirements for GAAP and IFRS. The amended guidance clarifies how certain fair value
measurement principles should be applied and requires enhanced fair value disclosures. The guidance
is effective for us on January 1, 2012. The adoption of this new guidance will result in additional fair
value disclosures, but will not impact our financial statement results.
In June 2011, the FASB issued amended guidance on the presentation of comprehensive
income intended to increase the prominence of items reported in other comprehensive income and to
facilitate convergence with IFRS. The amended guidance requires entities to present total
comprehensive income, which includes components of net income and components of other
comprehensive income, in either a single continuous statement of comprehensive income or in two
separate but consecutive statements. The guidance is effective for us on January 1, 2012. The guidance
will change our presentation of comprehensive income, but will not impact our financial statement
results.