Frontier Communications 2007 Annual Report Download - page 64

CITIZENS COMMUNICATIONS COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements
EITF No. 06-5 also states that a policyholder should determine the amount that could be realized under the life
insurance contract assuming the surrender of an individual-life by individual-life policy (or certificate by
certificate in a group policy). EITF No. 06-5 was effective for fiscal years beginning after December 15, 2006.
The adoption of the accounting requirements of EITF No. 06-5 in the first quarter of 2007 had no material impact
on our financial position, results of operation or cash flows.
Accounting for Endorsement Split-Dollar Life Insurance Arrangements
In September 2006, the FASB reached consensus on the guidance provided by EITF No. 06-4, “Accounting
for Deferred Compensation and Postretirement Benefit Aspects of Endorsement Split-Dollar Life Insurance
Arrangements.” The guidance is applicable to endorsement split-dollar life insurance arrangements, whereby the
employer owns and controls the insurance policy, that are associated with a postretirement benefit. EITF
No. 06-4 requires that for a split-dollar life insurance arrangement within the scope of the issue, an employer
should recognize a liability for future benefits in accordance with SFAS No. 106 (if, in substance, a
postretirement benefit plan exists) or Accounting Principles Board Opinion No. 12 (if the arrangement is, in
substance, an individual deferred compensation contract) based on the substantive agreement with the employee.
EITF No. 06-4 is effective for fiscal years beginning after December 15, 2007. We do not expect the adoption of
EITF No. 06-4 in the first quarter of 2008 to have a material impact on our financial position, results of
operations or cash flows.
Fair Value Measurements
In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements,” which defines fair value,
establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The
provisions of SFAS No. 157 are effective as of the beginning of our 2008 fiscal year. We do not expect the
adoption of SFAS No. 157, as amended, to have a material impact on our financial position, results of operations
or cash flows.
Fair Value Option for Financial Assets and Financial Liabilities
In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and
Financial Liabilities Including an amendment of FASB Statement No. 115,” which permits entities to choose to
measure many financial instruments and certain other items at fair value. The provisions of SFAS No. 159 are
effective as of the beginning of our 2008 fiscal year. We do not expect the adoption of SFAS No. 159 to have a
material impact on our financial position, results of operations or cash flows.
Accounting for Collateral Assignment Split-Dollar Life Insurance Arrangements
In March 2007, the FASB ratified the consensus reached by the EITF on Issue No. 06-10, “Accounting for
Collateral Assignment Split-Dollar Life Insurance Arrangements.” EITF No. 06-10 provides guidance on an
employers’ recognition of a liability and related compensation costs for collateral assignment split-dollar life
insurance arrangements that provide a benefit to an employee that extends into postretirement periods and the
asset in collateral assignment split-dollar life insurance arrangements. The effective date of EITF No. 06-10 is for
fiscal years beginning after December 15, 2007. We do not expect the adoption of EITF No. 06-4 in the first
quarter of 2008 to have a material impact on our financial position, results of operations or cash flows.
Business Combinations
In December 2007, the FASB revised SFAS Statement No. 141, “Business Combinations”. The revised
statement, SFAS No. 141R, requires an acquiring entity to recognize all the assets acquired and liabilities
assumed in a transaction at the acquisition date at fair value, to remeasure liabilities related to contingent
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