Kodak 2012 Annual Report Download - page 73

Table of Contents
January 1, 2013. The adoption of this guidance requires changes in presentation only and will have no impact on Kodak’s Consolidated
Financial Statements.
In July 2012, the FASB issued ASU No. 2012-02, “Intangibles-Goodwill and Other (ASC Topic 350) – Testing Indefinite-Lived Intangible
Assets for Impairment.” ASU No. 2012-02 amends the impairment test for indefinite-lived intangible assets by allowing companies to first
assess the qualitative factors to determine if it is more likely than not that an indefinite-lived intangible asset might be impaired as a basis for
determining whether it is necessary to perform the quantitative impairment test. The changes to the ASC as a result of this update are effective
prospectively for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012 (January 1, 2013 for
Kodak). Kodak does not expect that the adoption of this guidance will have a material impact on its Consolidated Financial Statements.
In December 2011, the FASB issued ASU No. 2011-10, “Derecognition of in Substance Real Estate – a Scope Clarification,” which amends
ASC Topic 360, “Property, Plant and Equipment.” ASU No. 2011-10 states that when an investor ceases to have a controlling financial interest
in an entity that is in-substance real estate as a result of a default on the entity’s nonrecourse debt, the investor should apply the guidance under
ASC Subtopic 360-20, Property, Plant and Equipment – Real Estate Sales to determine whether to derecognize the entity’s assets (including real
estate) and liabilities (including the nonrecourse debt). The changes to the ASC as a result of this update are effective prospectively for
deconsolidation events occurring during fiscal years, and interim periods within those years, beginning on or after June 15, 2012 (January 1,
2013 for Kodak). Adoption of this guidance will not impact Kodak’s Consolidated Financial Statements.
NOTE 3: LIABILITIES SUBJECT TO COMPROMISE
The following table reflects pre-petition liabilities that are subject to compromise.
The Bankruptcy Filing constituted an event of default with respect to certain of the Company’s debt instruments. Refer to Note 11, “Short-Term
Borrowings and Long-Term Debt” for additional information. Settlements relate to allowed claims under agreements reached with various
creditors, including $650 million related to the settlement agreement reached with the Retiree Committee. Refer to Note 1, “Bankruptcy
Proceedings” for additional information. Other liabilities subject to compromise include accrued liabilities for customer programs, deferred
compensation, environmental, taxes, and contract and lease rejections.
The amount of liabilities subject to compromise represents the Debtors’ estimate, where an estimate is determinable, of known or potential pre-
petition claims to be addressed in connection with the bankruptcy proceedings. Such liabilities are reported at the Debtors’ current estimate,
where an estimate is determinable, of the allowed claim amount, even though they may settle for lesser amounts. These claims remain subject to
future adjustments, which may result from: negotiations; actions of the Bankruptcy Court; disputed claims; rejection of contracts and unexpired
leases; the determination as to the value of any collateral securing claims; proofs of claims; or other events. Refer to Note 1, “Bankruptcy
Proceedings” for additional information.
69
(in millions)
As of
December 31,
2012
Accounts payable
$
283
Debt
683
Pension and other postemployment obligations
785
Settlements
710
Other liabilities subject to compromise
255
Liabilities subject to compromise
$
2,716