Comcast 2008 Annual Report Download - page 37

indicated that the estimated fair value of our cable franchise rights
exceeded the carrying value (“headroom”) for each of our units of
accounts by a significant amount (see table below). Given the sig-
nificant headroom that existed on July 1, 2008, we do not believe
the current economic environment, regulatory changes, or the
decline in our market capitalization since our July 1 testing, repre-
sent events or changes in circumstances that are indicative of an
impairment of value at December 31, 2008. The table below illus-
trates the impairment related to our various cable divisions that
would have occurred had the hypothetical reductions in fair value
existed at the time of our last annual impairment testing.
Percent Hypothetical Reduction in Fair Value
and Related Impairment
(in millions) 10% 15% 20% 25%
Eastern Division $ — $ (55) $ (999) $ (1,942)
NorthCentral Division — — — —
Southern Division — — — —
Western Division — — — —
$ — $ (55) $ (999) $ (1,942)
Income Taxes
Our provision for income taxes is based on our current period
income, changes in deferred income tax assets and liabilities,
income tax rates, changes in estimates of our uncertain tax posi-
tions, and tax planning opportunities available in the jurisdictions in
which we operate. We prepare and file tax returns based on our
interpretation of tax laws and regulations, and we record estimates
based on these judgments and interpretations.
On January 1, 2007, we adopted Financial Accounting Standards
Board (“FASB”) Interpretation (“FIN”) No. 48, “Accounting for
Uncertainty in Income Taxes – an Interpretation of FASB State-
ment No. 109,” (“FIN 48”). We evaluate our tax positions using the
recognition threshold and the measurement attribute in accord-
ance with this interpretation. From time to time, we engage in
transactions in which the tax consequences may be subject to
uncertainty. Examples of these transactions include business
acquisitions and disposals, including consideration paid or
received in connection with these transactions, and certain financ-
ing transactions. Significant judgment is required in assessing and
estimating the tax consequences of these transactions. We
determine whether it is more likely than not that a tax position will
be sustained on examination, including the resolution of any
related appeals or litigation processes, based on the technical
merits of the position. In evaluating whether a tax position has met
the more-likely-than-not recognition threshold, we presume that
the position will be examined by theappropriatetaxingauthority
that has full knowledge of all relevant information. A tax position
that meets the more-likely-than-not recognition threshold is meas-
ured to determine the amount of benefit to be recognized in the
financial statements. The tax position is measured at the largest
amount of benefit that has a greater than 50% likelihood of being
realized when the position is ultimately resolved.
We adjust our estimates periodically because of ongoing examina-
tions by and settlements with the various taxing authorities, as well
as changes in tax laws, regulations and precedent. The effects on
our financial statements of income tax uncertainties that arise in
connection with business combinations and those associated with
entities acquired in business combinations are discussed in Note 2
to our consolidated financial statements. We believe that adequate
accruals have been made for income taxes. When uncertain tax
positions are ultimately resolved, either individually or in the
aggregate, differences between our estimated amounts and the
actual amounts are not expected to have a material adverse effect
on our consolidated financial position but could possibly be
material to our consolidated results of operations or cash flow for
any one period.
35 Comcast 2008 Annual Report on Form 10-K