Kroger 2010 Annual Report Download - page 151

A-71
NO T E S T O CO N S O L I D A T E D FI N A N C I A L ST A T E M E N T S , CO N T I N U E D
Multi-Employer Plans
The Company also contributes to various multi-employer pension plans based on obligations arising
from most of its collective bargaining agreements. These plans provide retirement benefits to participants
based on their service to contributing employers. The benefits are paid from assets held in trust for that
purpose. Trustees are appointed in equal number by employers and unions. The trustees typically are
responsible for determining the level of benefits to be provided to participants as well as for such matters
as the investment of the assets and the administration of the plans.
The Company recognizes expense in connection with these plans as contributions are funded. The
Company made contributions to these funds, and recognized expense, of $262 in 2010, $233 in 2009, and
$219 in 2008.
Based on the most recent information available to it, the Company believes that the present value of
actuarial accrued liabilities in most or all of these multi-employer plans substantially exceeds the value of
the assets held in trust to pay benefits. Moreover, if the Company were to exit certain markets or otherwise
cease making contributions to these funds, the Company could trigger a substantial withdrawal liability.
Any adjustment for withdrawal liability will be recorded when it is probable that a liability exists and can
be reasonably estimated.
14. R E C E N T L Y AD O P T E D AC C O U N T I N G ST A N D A R D S
In January 2010, the FASB amended its standards related to fair value measurements and disclosures,
which were effective for interim and annual fiscal periods beginning after December 15, 2009, except
for disclosures about certain Level 3 activity that will become effective for interim and annual periods
beginning after December 15, 2010. The new standards require the Company to disclose transfers in and
out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers as well
as activity in Level 3 fair value measurements. The new standards also require a more detailed level of
disaggregation of the assets and liabilities being measured as well as increased disclosures regarding inputs
and valuation techniques of the fair value measurements. The Company adopted the amended standards
effective January 31, 2010, except for disclosures about certain Level 3 activity, which will be effective
starting January 30, 2011. See Note 7 to the Consolidated Financial Statements for the Company’s fair value
measurements and disclosures.
In June 2009, the FASB amended its existing standards related to the consolidation of VIEs, which
was effective for interim and annual fiscal periods beginning after November 15, 2009. The new standards
require an entity to analyze whether its variable interests give it a controlling financial interest of a VIE and
outlines what defines a primary beneficiary. The new standards amend GAAP by: (a) changing certain rules
for determining whether an entity is a VIE; (b) replacing the quantitative approach previously required
for determining the primary beneficiary with a more qualitative approach; and (c) requiring entities to
continuously analyze whether they are the primary beneficiary of a VIE, among other amendments. The
new standards also require enhanced disclosures regarding an entity’s involvement in a VIE. The Company
adopted the amended standards effective January 31, 2010. The adoption of these new standards did not
have a material effect on the Company’s Consolidated Financial Statements.
Effective February 1, 2009, the Company adopted the new standards that clarify that share-based
payment awards that entitle their holders to receive nonforfeitable dividends before vesting should be
considered participating securities and included in the computation of EPS pursuant to the two-class
method. See Note 9 to the Consolidated Financial Statements for further discussion of its adoption.