Kimberly-Clark 2007 Annual Report Download - page 68

Download and view the complete annual report

Please find page 68 of the 2007 Kimberly-Clark annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 123

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123

KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and
Financial Liabilities (“SFAS 159”). SFAS 159 allows entities to choose, at specified election dates, to measure
financial instruments (financial assets and liabilities) at fair value (the “Fair Value Option”). The election is made
on an instrument-by-instrument basis and is irrevocable. If the Fair Value Option is elected for an instrument,
SFAS 159 specifies that all subsequent changes in fair value for that instrument be reported in earnings.
SFAS 159 is effective as of the beginning of the first fiscal year that begins after November 15, 2007. The
Corporation will not apply the Fair Value Option to any of its existing financial assets or liabilities.
In December 2007, the FASB issued SFAS No. 141(R), Business Combinations (“SFAS 141(R)”).
SFAS 141(R) requires the acquirer in a business combination to:
• recognize 100 percent of the fair values of acquired assets, including goodwill, and assumed liabilities,
with only limited exceptions, even if the acquirer has not acquired 100 percent of the target entity,
• fair value contingent consideration arrangements at the acquisition date,
• expense transaction costs as incurred rather than being considered part of the fair value of an acquirer’s
interest,
• fair value certain preacquisition contingencies, such as environmental or legal issues,
• limit accrual of the costs for a restructuring plan in purchase accounting, and
• capitalize the value of acquired research and development as an indefinite-lived intangible asset, subject
to impairment accounting, rather than being expensed at the acquisition date.
SFAS 141(R) is effective for fiscal years beginning after December 15, 2008. Adoption is prospective, and
early adoption is not permitted. Adoption of SFAS 141(R) is not expected to have a material effect on the
Corporation’s financial statements.
In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial
Statements, an amendment of ARB No. 51 (“SFAS 160”).SFAS 160 clarifies the classification of noncontrolling
interests (i.e., minority owners’ interests in subsidiaries) in consolidated balance sheets and the accounting for
and reporting of transactions between the reporting entity and holders of such noncontrolling interests.
Under SFAS 160:
• Noncontrolling interests are reported as an element of consolidated equity, thereby eliminating the
current practice of classifying minority owners’ interests within a mezzanine section of the balance
sheet.
• The current practice of reporting minority owners’ share of subsidiaries net income will change.
Reported net income will consist of the total income of all consolidated subsidiaries, with separate
disclosure on the face of the income statement of the split of that income between the controlling and
noncontrolling interests.
• Increases and decreases in the noncontrolling ownership interest amount will be accounted for as equity
transactions. If the controlling interest loses control and deconsolidates a subsidiary, full gain or loss on
the transition will be recognized.
48