DIRECTV 2003 Annual Report Download - page 85

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THE DIRECTV GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (continued)
instruments, including certain derivative instruments embedded in other contracts (collectively referred to as
derivatives) and for hedging activities under SFAS No. 133, “Accounting for Derivative Instruments and
Hedging Activities.” SFAS No. 149 is effective for contracts entered into or modified after June 30, 2003, and
for hedging relationships designated after June 30, 2003. The adoption of this standard had no impact on the
Company’s consolidated results of operations or financial position.
The Company adopted SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities,”
on January 1, 2003. SFAS No. 146 generally requires the recognition of costs associated with exit or disposal
activities when incurred rather than at the date of a commitment to an exit or disposal plan. SFAS No. 146
replaces previous accounting guidance provided by EITF Issue No. 94-3, “Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring).” The adoption of this standard did not have a significant impact on the Company’s consolidated
results of operations or financial position.
The Company adopted SFAS No. 145, “Rescission of FASB Statements No. 4, 44 and 64, Amendment of
FASB Statement No. 13 and Technical Corrections,” on January 1, 2003. SFAS No. 145 eliminates the
requirement to present gains and losses on the early extinguishment of debt as an extraordinary item, and
resolves accounting inconsistencies for certain lease modifications. The adoption of this standard had no impact
on the Company’s consolidated results of operations or financial position.
The Company adopted SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”
on January 1, 2002. SFAS No. 144 refined existing impairment accounting guidance and extended the use of this
accounting to discontinued operations. SFAS No. 144 allowed the use of discontinued operations accounting
treatment for both reporting segments and distinguishable components thereof. SFAS No. 144 also eliminated the
existing exception to consolidation of a subsidiary for which control is likely to be temporary. The operating
results of discontinued businesses such as DIRECTV Broadband, which previously would not have been reported
as a discontinued operation, have been reported as a discontinued operation in the Consolidated Statements of
Income under this new standard in all periods presented herein.
The Company adopted SFAS No. 141, “Business Combinations” on July 1, 2001. SFAS No. 141 required
that all business combinations initiated after June 30, 2001 be accounted for under the purchase method and
prohibited the amortization of goodwill and intangible assets with indefinite lives acquired thereafter. The
adoption of SFAS No. 141 did not have a significant impact on the Company’s consolidated results of operations
or financial position.
The Company adopted SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” on
January 1, 2001. SFAS No. 133 requires the Company to carry all derivative financial instruments on the balance
sheet at fair value. In accordance with the transition provisions of SFAS No. 133, the Company recorded a one-
time after-tax charge of $7.4 million on January 1, 2001 as a cumulative effect of accounting change in the
Consolidated Statements of Income and an after-tax unrealized gain of $0.4 million in “Accumulated Other
Comprehensive Income (Loss).”
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