Archer Daniels Midland 2009 Annual Report Download - page 46

Download and view the complete annual report

Please find page 46 of the 2009 Archer Daniels Midland annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 96

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96

40
Archer Daniels Midland Company
Notes to Consolidated Financial Statements
Note 1.
Summary of Significant Accounting Policies
Nature of Business
The Company is principally engaged in procuring, transporting, storing, processing, and merchandising agricultural
commodities and products.
Principles of Consolidation
The consolidated financial statements as of June 30, 2009, and for the three years then ended include the accounts
of the Company and its majority-owned subsidiaries. All significant intercompany accounts and transactions have
been eliminated. Investments in affiliates are carried at cost plus equity in undistributed earnings since acquisition
and are adjusted, where appropriate, for amortizable basis differences between the investment balance and the
underlying net assets of the investee. Certain majority-owned subsidiaries whose fiscal periods differ from the
Company’s are consolidated using the most recent available financial statements which in each case are within 93
days of the Company’s year end and are consistent from period to period. The Company evaluates and
consolidates, where appropriate, its less than majority-owned investments pursuant to Financial Accounting
Standards Board (FASB) Interpretation No. 46, Consolidation of Variable Interest Entities, an Interpretation of
Accounting Research Bulletin No. 51 (FIN 46).
Use of Estimates
The preparation of consolidated financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect amounts reported in its consolidated financial
statements and accompanying notes. Actual results could differ from those estimates.
Reclassifications
Certain items in prior years’ consolidated statements of cash flows have been reclassified to conform to the current
year’s presentation with no impact to total cash provided by (used in) operating, investing, or financing activities.
Cash Equivalents
The Company considers all non-segregated, highly-liquid investments with a maturity of three months or less at the
time of purchase to be cash equivalents.
Segregated Cash and Investments
The Company segregates certain cash and investment balances in accordance with certain regulatory requirements,
commodity exchange requirements, and insurance arrangements. These segregated balances represent deposits
received from customers trading in exchange-traded commodity instruments, securities pledged to commodity
exchange clearinghouses, and cash and securities pledged as security under certain insurance arrangements.
Segregated cash and investments primarily consist of cash, United States government securities, and money-market
funds.