Medtronic 2013 Annual Report Download - page 85

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Table of Contents
Medtronic, Inc.
Notes to Consolidated Financial Statements (Continued)
Not Yet Adopted
In December 2011 and January 2013, the FASB issued new accounting guidance related to disclosures on offsetting assets and
liabilities on the balance sheet. This newly issued accounting standard requires an entity to disclose both gross and net information
about instruments and transactions eligible for offset in the balance sheet as well as instruments and transactions executed under
a master netting or similar arrangement and was issued to enable users of financial statements to understand the effects or potential
effects of those arrangements on its financial position. This accounting guidance is required to be applied retrospectively and is
effective for the Company beginning in the first quarter of fiscal year 2014. Since the accounting guidance only impacts disclosure
requirements, its adoption will not have a material impact on the Company’s consolidated financial statements.
In July 2012, the FASB updated the accounting guidance related to annual and interim indefinite-lived intangible asset impairment
testing. The updated accounting guidance allows entities to first assess qualitative factors before performing a quantitative
assessment of the fair value of indefinite-lived intangible assets. If it is determined on the basis of qualitative factors that the fair
value of indefinite-lived intangible assets is more likely than not less than the carrying amount, the existing quantitative impairment
test is required. Otherwise, no further impairment testing is required. The Company will adopt this accounting guidance in the
first quarter of fiscal year 2014 and does not expect it to have a material impact on the Company’s consolidated financial statements.
In February 2013, the FASB expanded the disclosure requirements with respect to changes in accumulated other comprehensive
income (AOCI). Under this new guidance, companies will be required to disclose the amount of income (or loss) reclassified out
of AOCI to each respective line item on the statements of earnings where net income is presented. The guidance allows companies
to elect whether to disclose the reclassification either in the notes to the financial statements or parenthetically on the face of the
financial statements. This update is effective for the Company beginning in the first quarter of fiscal year 2014. Since the accounting
guidance only impacts disclosure requirements, its adoption will not have a material impact on the Company’s consolidated
financial statements.
In March 2013, the FASB issued amended guidance on a parent company's accounting for the cumulative translation adjustment
(CTA) recorded in AOCI associated with a foreign entity. The amendment requires a parent to release into net income the CTA
related to its investment in a foreign entity when it either sells a part or all of its investment in, or no longer holds a controlling
financial interest in a subsidiary or group of assets within a foreign entity. This accounting guidance is effective for the Company
beginning in the first quarter of fiscal year 2015, with early adoption permitted. Subsequent to adoption, this amended guidance
would impact the Company's financial position and results of operations prospectively in the instance of an event or transaction
described above.
2. Certain Litigation Charges, Net
The Company classifies material litigation reserves and gains recognized as certain litigation charges, net.
During fiscal year 2013, the Company recorded certain litigation charges, net of $245 million related to probable and reasonably
estimated damages resulting from patent litigation with Edwards Lifesciences, Inc. Refer to Note 17 for additional information.
During fiscal year 2012, the Company recorded certain litigation charges, net of $90 million related to the agreement to settle the
federal securities class action initiated in December 2008 by the Minneapolis Firefighters’ Relief Association. During the fourth
quarter of fiscal year 2012, Medtronic settled all of these class claims for $85 million and incurred $5 million in additional litigation
fees.
During fiscal year 2011, the Company recorded certain litigation charges, net of $245 million related primarily to a $221 million
settlement involving the Sprint Fidelis family of defibrillation leads and charges for certain Other Matters litigation. The Sprint
Fidelis settlement related to the resolution of certain outstanding product liability litigation related to the Sprint Fidelis family of
defibrillation leads that were subject to a field action announced October 15, 2007. During the third quarter of fiscal year 2012,
the Company paid out the settlement for both the Sprint Fidelis settlement and for certain Other Matters litigation. Refer to Note
17 for additional information.
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