Ford 2010 Annual Report Download - page 82

Notes to the Financial Statements
80 Ford Motor Company | 2010 Annual Report
NOTE 1. PRESENTATION
For purposes of this report, "Ford," the "Company," "we," "our," "us" or similar references mean Ford Motor Company
and our consolidated subsidiaries and our consolidated variable interest entities ("VIEs") of which we are the primary
beneficiary, unless the context requires otherwise.
We prepare our financial statements in accordance with generally accepted accounting principles ("GAAP") in the
United States. We present the financial statements on a consolidated basis and on a sector basis for our Automotive and
Financial Services sectors. The additional information provided in the sector statements enables the reader to better
understand the operating performance, financial position, cash flows, and liquidity of our two very different businesses.
We eliminate all intercompany items and transactions in the consolidated and sector balance sheets. In certain
circumstances, presentation of these intercompany eliminations or consolidated adjustments differ between the
consolidated and sector financial statements. These line items are reconciled below under "Reconciliations between
Consolidated and Sector Financial Statements."
We reclassified certain prior year amounts in our consolidated financial statements to conform to current year
presentation.
All held-for-sale assets and liabilities are excluded from the footnotes unless otherwise noted. For information about
our held-for-sale operations see Note 24.
In the first quarter of 2009, our wholly-owned subsidiary Ford Motor Credit Company LLC ("Ford Credit") recorded a
$630 million cumulative adjustment to correct for the overstatement of Financial Services sector cash and cash
equivalents and certain accounts payable that originated in prior periods. The impact on previously-issued annual and
interim financial statements was not material.
Adoption of New Accounting Standards
Financing Receivables. During the fourth quarter of 2010, we adopted the new accounting standard requiring
expanded disclosures about the credit quality of financing receivables and the allowance for credit losses. The new
standard requires disaggregation of disclosures by portfolio segment or by class of financing receivable, and provides
additional implementation guidance for determining the level of disaggregation of information. The standard also requires
new disclosures on credit quality indicators, and past due information and modifications of financing receivables. Refer to
Notes 7 and 9 for further disclosure regarding our finance receivables.
Fair Value Measurements. During the first quarter of 2010, we adopted the new accounting standard on fair value
measurements which both requires new disclosures and clarifies existing disclosure requirements. The standard requires
assets and liabilities measured at fair value to be further disaggregated by class in the disclosures. The standard also
requires expanded disclosures about the valuation techniques and inputs used to measure fair value. Refer to Notes 4
and 18 for further information regarding our fair value measurements.
Transfers of Financial Assets. During the first quarter of 2010, we adopted the new accounting standard related to
transfers of financial assets. The standard requires greater transparency about transfers of financial assets and a
company's continuing involvement in the transferred financial assets. The standard also removes the concept of a
qualifying special-purpose entity from U.S. GAAP and changes the requirements for derecognizing financial assets. The
new accounting standard did not have a material impact on our financial condition, results of operations, or financial
statement disclosures.
Variable Interest Entities. On January 1, 2010, we adopted the new accounting standard on variable interest entities.
The standard requires ongoing assessments of whether an entity is the primary beneficiary of a VIE, and enhances the
disclosures about an entity's involvement with a VIE. This standard requires the consolidation of a VIE if an entity has
both (i) the power to direct the activities of the VIE, and (ii) the obligation to absorb losses or the right to receive residual
returns that could potentially be significant to the VIE.
In applying this new standard, we deconsolidated certain Automotive joint ventures previously consolidated because
we lacked the power to direct the activities of the VIEs that most significantly impacted the VIEs' economic performance.