Oracle 2007 Annual Report Download - page 84

Table of Contents
ORACLE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
May 31, 2008
On June 1, 2007, we adopted FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an
interpretation of FASB Statement No. 109 (FIN 48), which contains a two-step approach to recognizing and
measuring uncertain tax positions taken or expected to be taken in a tax return, We first determine if the weight of
available evidence indicates that it is more likely than not that the tax position will be sustained on audit, including
resolution of any related appeals or litigation processes. The second step is that we measure the tax benefit as the
largest amount that is more than 50% likely to be realized upon ultimate settlement. FIN 48 also required us to
reclassify the majority of our uncertain tax positions from current to non-current in fiscal 2008 (FIN 48 does not
allow for retroactive treatment or presentation). We have recognized interest and penalties related to uncertain tax
positions in our provision for income taxes line of our consolidated statements of operations. The impact of our
adoption of FIN 48 is more fully discussed in Note 12.
Recent Accounting Pronouncements
Determination of the Useful Life of Intangible Assets: In April 2008, the FASB issued FASB Staff Position (FSP)
FAS 142-3, Determination of the Useful Life of Intangible Assets. FSP FAS 142-3 amends the factors that should be
considered in developing renewal or extension assumptions used to determine the useful life of a recognized
intangible asset under FASB Statement No. 142, Goodwill and Other Intangible Assets. FSP FAS 142-3 is effective
for fiscal years beginning after December 15, 2008 and early adoption is prohibited. We are currently evaluating the
impact of the pending adoption of FSP FAS 142-3 on our consolidated financial statements.
Derivative Instruments and Hedging Activities Disclosures: In March 2008, the FASB issued Statement No. 161,
Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133.
Statement 161 requires disclosure of how and why an entity uses derivative instruments, how derivative instruments
and related hedged items are accounted for and how derivative instruments and related hedged items affect an
entity’s financial position, financial performance, and cash flows. Statement 161 is effective for fiscal years
beginning after November 15, 2008, with early adoption permitted. We are currently evaluating the impact of the
pending adoption of Statement 161 on our consolidated financial statements.
Business Combinations: In December 2007, the FASB issued Statement No. 141 (revised 2007), Business
Combinations. The standard changes the accounting for business combinations including the measurement of
acquirer shares issued in consideration for a business combination, the recognition of contingent consideration, the
accounting for pre-acquisition gain and loss contingencies, the recognition of capitalized in-process research and
development, the accounting for acquisition related restructuring liabilities, the treatment of acquisition related
transaction costs and the recognition of changes in the acquirer’s income tax valuation allowance. Statement 141(R)
is effective for fiscal years beginning after December 15, 2008, with early adoption prohibited. We are currently
evaluating the impact of the pending adoption of Statement 141(R) on our consolidated financial statements. We
currently believe that the adoption of Statement 141(R) will result in the recognition of certain types of expenses in
our results of operations that are currently capitalized pursuant to existing accounting standards, amongst other
potential impacts.
Accounting and Reporting of Noncontrolling Interests: In December 2007, the FASB issued Statement No. 160,
Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51. The standard changes
the accounting for noncontrolling (minority) interests in consolidated financial statements including the requirements
to classify noncontrolling interests as a component of consolidated stockholders’ equity, and the elimination of
“minority interest” accounting in results of operations with earnings attributable to noncontrolling interests reported
as a part of consolidated earnings. Additionally, Statement 160 revises the accounting for both increases and
decreases in a parent’s controlling ownership interest. Statement 160 is effective for fiscal years beginning after
December 15, 2008, with early adoption prohibited. We are currently evaluating the impact of the pending adoption
of Statement 160 on our consolidated financial statements.
79
Source: ORACLE CORP, 10-K, July 02, 2008 Powered by Morningstar® Document Research℠