Lexmark 2011 Annual Report Download - page 89

application of existing fair value measurement guidance. Amendments of this nature include limiting
the concepts of valuation premise and highest and best use to the measurement of nonfinancial
assets. ASU 2011-04 also requires additional fair value disclosures including a qualitative discussion
about the sensitivity of recurring Level 3 fair value measurements and the categorization by level of the
fair value hierarchy for items that are not measured at fair value in the statement of financial position
but for which the fair value is required to be disclosed. The amendments will be effective for the
Company in the first quarter of fiscal 2012 and must be applied prospectively. Although the Company
is in the process of evaluating the impact of the new guidance, it currently believes that the changes to
the fair value measurement guidance will not have a significant impact on its financial statements.
In June 2011, the FASB issued ASU No. 2011-05, Comprehensive Income (Topic 220): Presentation
of Comprehensive Income (“ASU 2011-05”). ASU 2011-05 eliminates the option to present items of
other comprehensive income in the statement of changes in stockholders’ equity and requires an entity
to present the components of net income and other comprehensive income in either a single
continuous statement or in two separate, but consecutive, statements. The amendments in ASU
2011-05 also require an entity to present on the face of the financial statement(s) reclassification
adjustments for items that are reclassified from other comprehensive income to net income, thus
eliminating the option to disclose these items in the notes to the financial statements.
In December, 2011, the FASB issued ASU No. 2011-12, Comprehensive Income (Topic 220): Deferral
of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of
Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05 (“ASU
2011-12”). ASU 2011-12 defers the new requirement to present reclassification adjustments on the
face of the financial statements for both interim and annual periods, reinstating the reporting
requirements related to reclassification adjustments in effect before ASU 2011-05.
ASU 2011-05 and ASU 2011-12, collectively, require retrospective application and will be effective for
the Company in the first quarter of fiscal 2012. Although early adoption is permitted, the Company has
not adopted the ASUs for its 2011 financial statements. The adoption of ASU 2011-05 and ASU
2011-12 will require changes in the presentation of the Company’s financial statements and notes but
should have no other impact on the Company.
In September 2011, the FASB issued ASU No. 2011-08, Intangibles — Goodwill and Other (Topic
350): Testing Goodwill for Impairment (“ASU 2011-08”). The amendments in ASU 2011-08 permit an
entity to first assess qualitatively whether it is necessary to perform step one of the two-step annual
goodwill impairment test required under existing guidance. Under the amended guidance, an entity is
required to perform step one only if the entity determines through its qualitative assessment that it is
more likely than not (a likelihood of more than 50 percent) that the fair value of a reporting unit is less
than its carrying amount, including goodwill. ASU 2011-08 also provides examples of events and
circumstances that an entity should consider when performing the qualitative assessment. The
examples of events and circumstances included in the amended guidance replace those used under
existing guidance to determine whether it is necessary to test goodwill for impairment during interim
periods. The amendments in ASU 2011-08 must be applied prospectively to goodwill impairment tests
performed by the Company for its 2012 fiscal year. Although the Company was permitted to early
adopt the amendments under ASU 2011-08, the Company did not apply the amended guidance to its
annual impairment tests performed in the fourth quarter of 2011. The Company is in the process of
evaluating the effect(s) of the amended guidance on its annual goodwill impairment tests but
anticipates no material impact to the Company’s financial statements upon adoption.
In December 2011, the FASB issued ASU No. 2011-11, Balance Sheet (Topic 210): Disclosures about
Offsetting Assets and Liabilities (“ASU 2011-11”). ASU 2011-11 amends the disclosure requirements
on offsetting financial instruments, requiring entities to disclose both gross information and net
information about instruments and transactions eligible for offset in the statement of financial position
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