Motorola 2008 Annual Report Download - page 99

Reclassifications: Certain amounts in prior years’ financial statements and related notes have been
reclassified to conform to the 2008 presentation.
Recent Accounting Pronouncements: The Company adopted Financial Accounting Standards Board
(“FASB”) Statement of Financial Accounting Standard (“SFAS”) No. 157, “Fair Value Measurements”
(“SFAS 157”) on January 1, 2008 for financial assets and liabilities, and non-financial assets and liabilities that are
recognized or disclosed at fair value in the financial statements on a recurring basis. SFAS 157 defines fair value,
establishes a framework for measuring fair value as required by other accounting pronouncements and expands
fair value measurement disclosures. The provisions of SFAS 157 were applied prospectively upon adoption and did
not have a material impact on the Company’s consolidated financial statements. The disclosures required by
SFAS 157 are included in Note 9, “Fair Value Measurements,” to the Company’s consolidated financial statements.
In February 2008, the FASB issued FASB Staff Position 157-2, which delays the effective date of SFAS 157 for
non-financial assets and liabilities, which are not measured at fair value on a recurring basis (at least annually)
until fiscal years beginning after November 15, 2008. The Company is currently assessing the impact of adopting
SFAS 157 for non-financial assets and liabilities on the Company’s consolidated financial statements.
In October 2008, the FASB issued FASB Staff Position (“FSP”) 157-3, which provided guidance to clarify the
application of FAS 157 in a market that is not active. The Company adopted this FSP in the fourth quarter of
2008. The net impact of this FSP was immaterial.
The Company adopted SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities—
Including an Amendment of FASB Statement No. 115” (“SFAS 159”) as of January 1, 2008. SFAS 159 permits
entities to elect to measure many financial instruments and certain other items at fair value. The Company did not
elect the fair value option for any assets or liabilities, which were not previously carried at fair value. Accordingly,
the adoption of SFAS 159 had no impact on the Company’s consolidated financial statements.
The Company adopted EITF 06-4, “Accounting for Deferred Compensation and Postretirement Benefit
Aspects of Endorsement Split-Dollar Life Insurance Arrangements” (“EITF 06-4”) as of January 1, 2008.
EITF 06-4 requires that endorsement split-dollar life insurance arrangements, which provide a benefit to an
employee beyond the postretirement period be recorded in accordance with SFAS No. 106, “Employer’s
Accounting for Postretirement Benefits Other Than Pensions” or APB Opinion No. 12, “Omnibus Opinion—
1967” (“the Statements”) based on the substance of the agreement with the employee. Upon adoption of
EITF 06-4, the Company recognized an increase in Other liabilities of $45 million with the offset reflected as a
cumulative-effect adjustment to January 1, 2008 Retained earnings and Non-owner changes to equity in the
amounts of $4 million and $41 million, respectively, in the Company’s consolidated statement of stockholders’
equity.
In December 2007, the FASB issued SFAS No. 141 (revised 2007) (“SFAS 141R”), a revision of SFAS 141,
“Business Combinations.” SFAS 141R establishes requirements for the recognition and measurement of acquired
assets, liabilities, goodwill and non-controlling interests. SFAS 141R also provides disclosure requirements related
to business combinations. SFAS 141R is effective for fiscal years beginning after December 15, 2008. SFAS 141R
will be applied prospectively to business combinations with an acquisition date on or after the effective date.
In December 2007, the FASB issued SFAS No. 160, “Non-Controlling Interests in Consolidated Financial
Statements an amendment of ARB No. 51” (“SFAS 160”). SFAS 160 establishes new standards for the accounting
for and reporting of non-controlling interests (formerly minority interests) and for the loss of control of partially
owned and consolidated subsidiaries. SFAS 160 does not change the criteria for consolidating a partially owned
entity. SFAS 160 is effective for fiscal years beginning after December 15, 2008. The provisions of SFAS 160 will
be applied prospectively upon adoption except for the presentation and disclosure requirements, which will be
applied retrospectively. The Company does not expect the adoption of SFAS 160 to have a material impact on the
Company’s consolidated financial statements.
In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging
Activities, an amendment of SFAS No. 133” (“SFAS 161”). SFAS 161 requires enhanced disclosures about an
entity’s derivative and hedging activities and is effective for fiscal years and interim periods beginning after
November 15, 2008. The Company is currently evaluating the additional disclosures required by SFAS 161.
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