Frontier Communications 2008 Annual Report Download - page 65

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asset in collateral assignment split-dollar life insurance arrangements. EITF No. 06-10 was effective for fiscal
years beginning after December 15, 2007. Our adoption of the accounting requirements of EITF No. 06-10 in
the first quarter of 2008 had no impact on our financial position, results of operations or cash flows.
Accounting for the Income Tax Benefits of Dividends on Share-Based Payment Awards
In June 2007, the FASB ratified EITF No. 06-11, “Accounting for the Income Tax Benefits of Dividends
on Share-Based Payment Awards.” EITF No. 06-11 provides that tax benefits associated with dividends on
share-based payment awards be recorded as a component of additional paid-in capital. EITF No. 06-11 was
effective, on a prospective basis, for fiscal years beginning after December 15, 2007. The implementation of
this standard in the first quarter of 2008 had no material impact on our financial position, results of operations
or cash flows.
Business Combinations
In December 2007, the FASB revised SFAS 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 consideration at fair
value in each subsequent reporting period and to expense all acquisition related costs. The effective date of
SFAS No. 141R is for business combinations for which the acquisition date is on or after the beginning of the
first annual reporting period beginning on or after December 15, 2008. This standard does not impact our
currently reported results and we do not expect the adoption of SFAS No. 141R in the first quarter of 2009 to
have a material impact on our financial position, results of operations or cash flows.
Noncontrolling Interests in Consolidated Financial Statements
In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial
Statements.” SFAS No. 160 establishes requirements for ownership interest in subsidiaries held by parties other
than the Company (sometimes called “minority interest”) be clearly identified, presented and disclosed in the
consolidated statement of financial position within shareholder equity, but separate from the parent’s equity. All
changes in the parent’s ownership interest are required to be accounted for consistently as equity transactions
and any noncontrolling equity investments in unconsolidated subsidiaries must be measured initially at fair
value. SFAS No. 160 is effective, on a prospective basis, for fiscal years beginning after December 15, 2008.
However, presentation and disclosure requirements must be retrospectively applied to comparative financial
statements. We do not expect the adoption of SFAS No. 160 in the first quarter of 2009 to have a material
impact on our financial position, results of operations or cash flows.
The Hierarchy of Generally Accepted Accounting Principles
In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting
Principles.” This standard identifies the sources of accounting principles and the framework for selecting the
principles to be used in the preparation of financial statements of nongovernmental entities that are presented in
conformity with U.S. GAAP. The effective date of SFAS No. 162 was November 15, 2008. Our adoption of
SFAS No. 162 during the fourth quarter of 2008 did not result in any changes to our current accounting
practices or policies and thereby has not impacted the preparation of the consolidated financial statements.
Determining Whether Instruments Granted in Share-Based Payment Transactions are Participating
Securities
In June 2008, the FASB ratified FSP EITF 03-6-1, “Determining Whether Instruments Granted in Share-
Based Payment Transactions are Participating Securities.” FSP EITF 03-6-1 addresses whether instruments
granted in share-based payment transactions are participating securities prior to vesting and, therefore, should
be included in the earnings allocation in computing earnings per share under the two-class method. FSP EITF
F-14
FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements