Alcoa 2013 Annual Report Download - page 113

information does not include the assets or operating results of businesses classified as discontinued operations for all
periods presented. Management does not expect any continuing involvement with these businesses following their
divestiture, and these businesses are expected to be disposed of within one year.
For businesses classified as held for sale that do not qualify for discontinued operations treatment, the balance sheet
and cash flow amounts are reclassified from their historical presentation to assets and liabilities of operations held for
sale for all periods presented. The results of operations continue to be reported in continuing operations. The gains or
losses associated with these divested businesses are recorded in restructuring and other charges on the Statement of
Consolidated Operations. The segment information includes the assets and operating results of businesses classified as
held for sale for all periods presented. Management expects that Alcoa will have continuing involvement with these
businesses following their divestiture, primarily in the form of equity participation, or ongoing aluminum or other
significant supply contracts.
Recently Adopted Accounting Guidance.
Comprehensive Income—On January 1, 2013, Alcoa adopted changes issued by the Financial Accounting
Standards Board (FASB) to the reporting of amounts reclassified out of accumulated other comprehensive income.
These changes require an entity to report the effect of significant reclassifications out of accumulated other
comprehensive income on the respective line items in net income if the amount being reclassified is required to be
reclassified in its entirety to net income. For other amounts that are not required to be reclassified in their entirety to net
income in the same reporting period, an entity is required to cross-reference other disclosures that provide additional
detail about those amounts. These requirements are to be applied to each component of accumulated other
comprehensive income. Other than the additional disclosure requirements (see Note B), the adoption of these changes
had no impact on the Consolidated Financial Statements.
On January 1, 2012, Alcoa adopted changes issued by the FASB to the presentation of comprehensive income. These
changes give an entity the option to present the total of comprehensive income, the components of net income, and the
components of other comprehensive income either in a single continuous statement of comprehensive income or in two
separate but consecutive statements; the option to present components of other comprehensive income as part of the
statement of changes in stockholders’ equity was eliminated. The items that must be reported in other comprehensive
income or when an item of other comprehensive income must be reclassified to net income were not changed.
Additionally, no changes were made to the calculation and presentation of earnings per share. Management elected to
present the two-statement option. Other than the change in presentation, the adoption of these changes had no impact
on the Consolidated Financial Statements.
Goodwill and Other Intangible Assets—On January 1, 2013, Alcoa adopted changes issued by the FASB to the
testing of indefinite-lived intangible assets for impairment, similar to the goodwill changes adopted in October 2011
(see below). These changes provide an entity the option to first assess qualitative factors to determine whether the
existence of events or circumstances leads to a determination that it is more likely than not (greater than 50%) that the
fair value of an indefinite-lived intangible asset is less than its carrying amount. Such qualitative factors may include
the following: macroeconomic conditions; industry and market considerations; cost factors; overall financial
performance; and other relevant entity-specific events. If an entity elects to perform a qualitative assessment and
determines that an impairment is more likely than not, the entity is then required to perform the existing two-step
quantitative impairment test, otherwise no further analysis is required. An entity also may elect not to perform the
qualitative assessment and, instead, proceed directly to the two-step quantitative impairment test. Notwithstanding the
adoption of these changes, management plans to proceed directly to the two-step quantitative test for Alcoa’s
indefinite-lived intangible assets. The adoption of these changes had no impact on the Consolidated Financial
Statements.
On January 1, 2011, Alcoa adopted changes issued by the FASB to the testing of goodwill for impairment. These
changes require an entity to perform all steps in the test for a reporting unit whose carrying value is zero or negative if
it is more likely than not (greater than 50%) that a goodwill impairment exists based on qualitative factors. This will
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