Kodak 2006 Annual Report Download - page 83

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FASB Statement No. 158
In September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans (an amend-
ment of FASB Statements No. 87, 88, 106, and 132(R)),” which is effective in fiscal years ending after December 15, 2006. This Statement requires
an employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan as an asset or liability in its statement of
financial position, and to recognize changes in that funded status in the year in which the changes occur through comprehensive income. SFAS No.
158 does not change the amount of actuarially determined expense that is recorded in the Consolidated Statement of Operations. SFAS No. 158 also
requires an employer to measure the funded status of a plan as of the date of its year-end statement of financial position, which is consistent with the
Company’s present measurement date. The adoption of SFAS No. 158 did not have any impact on the Company’s Consolidated Statement of Opera-
tions, Statement of Cash Flows, or compliance with its debt covenants.
The table below discloses the impact of adoption on the Company’s Consolidated Statement of Financial Position as of December 31, 2006.
Before Application Adjustments After Application
of SFAS No. 158 Increase/(Decrease) of SFAS No. 158
Other long-term assets $ 3,421 $ 304 $ 3,725
Total assets 14,016 304 14,320
Accounts payable and other current liabilities 4,100 43 4,143
Total current liabilities 4,928 43 4,971
Pension and other postretirement liabilities 3,318 646 3,964
Other long-term liabilities 1,282 1 1,283
Total liabilities 12,242 690 12,932
Accumulated other comprehensive loss (249) 386 (635)
Total shareholders’ equity 1,774 (386) 1,388
Total liabilities and shareholders’ equity $ 14,016 $ 304 $ 14,320
SAB No. 108
In September 2006, the SEC staff issued Staff Accounting Bulletin (SAB) No. 108, “Considering the Effects of Prior Year Misstatements when Quan-
tifying Misstatements in Current Year Financial Statements.” SAB No. 108 was issued in order to eliminate the diversity of practice surrounding how
public companies quantify financial statement misstatements. This SAB establishes a “dual approach” methodology that requires quantification of
financial statement misstatements based on the effects of the misstatements on each of the company’s financial statements (both the statement of
operations and statement of financial position). The SEC has stated that SAB No. 108 should be applied no later than the annual financial statements
for the first fiscal year ending after November 15, 2006, with earlier application encouraged.SAB No. 108 permits a company to elect either retrospec-
tive or prospective application. The Company’s prospective application requires recording a cumulative effect adjustment in the period of adoption, as
well as detailed disclosure of the nature and amount of each individual error being corrected through the cumulative adjustment and how and when it
arose. The Company’s application of SAB No. 108 in the fourth quarter of 2006 did not have any impact on its Consolidated Financial Statements.
FASB Statement No. 159
In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities,” which permits entities to
choose to measure, on an item-by-item basis, specified financial instruments and certain other items at fair value. Unrealized gains and losses on
items for which the fair value option has been elected are required to be reported in earnings at each reporting date. SFAS No. 159 is effective for
fiscal years beginning after November 15, 2007. The provisions of this statement are required to be applied prospectively. The Company expects to
adopt SFAS No. 159 in the first quarter of 2008.