Ford 2010 Annual Report Download - page 159

Notes to the Financial Statements
Ford Motor Company | 2010 Annual Report 157
NOTE 23. INCOME TAXES (Continued)
Other
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows for the years listed
(in millions):
2010
20102010
2010
2009
20092009
2009
Balance at January 1 ................................................................................................................................
...
$ 1,173 $ 1,898
Increase – tax positions in prior periods ................................................................................................
.....
138 282
Increase – tax positions in current period ................................................................................................
...
52 55
Decrease – tax positions in prior periods................................................................................................
....
(141) (213)
Settlements................................................................................................................................
..................
(109) (836)
Lapse of statute of limitations................................................................................................
.......................
(29) (37)
Foreign currency translation adjustment ................................................................................................
......
(21) 24
Balance at December 31................................................................................................
..............................
$ 1,063 $ 1,173
The amount of unrecognized tax benefits at December 31, 2010 and 2009 that would affect the effective tax rate if
recognized was $510 million and $745 million, respectively.
The U.S. and Canadian governments have reached agreement on our transfer pricing methodologies. The agreement
covers a number of years and has resulted in a favorable impact to the income tax provision of $196 million in 2009 after
the impact of valuation allowances, primarily resulting from the refund of prior Canadian tax payments.
Examinations by tax authorities have been completed through 1999 in Germany, 2005 in Canada, 2007 in the United
States, and 2006 in the United Kingdom. Although examinations have been completed in these jurisdictions, various
unresolved transfer pricing disputes exist for years dating back to 1994.
We recorded in our consolidated statement of operations approximately $45 million, $54 million, and $69 million in tax-
related interest income for the years ended December 31, 2010, 2009, and 2008. As of December 31, 2010 and 2009,
we had recorded a net payable of $77 million and $38 million, respectively, for tax-related interest.
NOTE 24. HELD-FOR-SALE OPERATIONS, DISCONTINUED OPERATIONS, OTHER DISPOSITIONS, AND
ACQUISITIONS
We classify disposal groups as held for sale when management, having the authority to approve the action, commits to
a plan to sell the disposal group, the sale is probable within one year and the disposal group is available for immediate
sale in its present condition. We also consider whether an active program to locate a buyer has been initiated, whether
the disposal group is marketed actively for sale at a price that is reasonable in relation to its current fair value, and
whether actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or
that the plan will be withdrawn. We classify disposal groups as discontinued operations when the criteria to be classified
as held for sale have been met and we will not have any significant involvement with the disposal groups after the sale.
We perform an impairment test on disposal groups. An impairment charge is recognized when the carrying value of
the disposal group exceeds the estimated fair value, less transaction costs. We estimate fair value under the market
approach to approximate the expected proceeds to be received.
We are required by U.S. GAAP to aggregate the assets and liabilities of all held-for-sale disposal groups on the
balance sheet for the period in which the disposal group is held for sale. To provide comparative balance sheets, we also
aggregate the assets and liabilities for significant held-for-sale disposal groups on the prior-period balance sheet.