Oracle 2008 Annual Report Download - page 95

Table of Contents
ORACLE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
May 31, 2009
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 accounting for income tax valuation allowances and
other income tax uncertainties, amongst other impacts. In April 2009, the FASB issued FSP
No. FAS 141(R)-1 Accounting for Assets Acquired and Liabilities Assumed in a Business Combinations That
Arise from Contingencies. FSP No. FAS 141(R)-1 amends and clarifies the accounting for acquired
contingencies and is effective upon the adoption of Statement 141(R). We will adopt Statement 141(R) and
the related Staff Position in fiscal 2010 and believe that the adoption of Statement 141(R) will result in the
recognition of certain types of expenses in our results of operations that were previously capitalized pursuant
to pre-adoption accounting standards, amongst other potential impacts. A discussion of the more significant
items of Statement 141(R) that could materially affect our consolidated financial statements and our
accounting policy for these items is included in our discussion of “Significant Accounting Policies—Business
Combinations” above.
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. In
fiscal 2010, we will adopt Statement 160 and generally believe it will not materially affect our consolidated
financial statements. Upon our adoption of Statement 160, we will retrospectively classify noncontrolling
(minority) interest positions of consolidated entities as a separate component of consolidated stockholders’
equity from the equity attributable to Oracle’s stockholders for all periods presented. Net income and
comprehensive income will be attributed to Oracle stockholders and the noncontrolling interests. In addition,
Statement 160 requires that any change in our ownership of a majority-owned subsidiary be prospectively
accounted for as an equity transaction provided that we retain control of the subsidiary. This requirement is a
change to current practice whereby gains or losses may be recognized on the sales of our interests in a
subsidiary, regardless of whether we maintain control. While we have not recognized any material gains or
losses on such ownership sales during fiscal 2009, 2008 or 2007, the timing and amount of any future gains or
losses on sales of our ownership interests in our subsidiaries could be materially affected as a result of our
fiscal 2010 adoption of Statement 160.
Fair Value Measurements: In September 2006, the FASB issued Statement No. 157, Fair Value
Measurements. Statement 157 defines fair value, establishes a framework for measuring fair value and
expands fair value measurement disclosures. In February 2008, the FASB issued FASB Staff Position
No. FAS 157-1, Application of FASB Statement No. 157 to FASB Statement No. 13 and Other Accounting
Pronouncements That Address Fair Value Measurements for Purposes of Lease Classification or
Measurement under Statement 13 and FASB Staff Position No. FAS 157-2, Effective Date of FASB Statement
No. 157. Collectively, the Staff Positions defer the effective date of Statement 157 to fiscal years beginning
after November 15, 2008 for nonfinancial assets and nonfinancial liabilities except for items that are
recognized or disclosed at fair value on a recurring basis at least annually, and amend the scope of Statement
157. In October 2008, the FASB issued FASB Staff Position FAS 157-3, Determining the Fair Value of a
Financial Asset When the Market for That Asset Is Not Active, which clarified the application of how the fair
value of a financial asset is determined when the market for that financial asset is inactive. FSP
No. FAS 157-3 was effective upon issuance, including prior periods for which financial statements had not
been issued. In April 2009, the FASB issued FASB Staff Position No. FAS 157-4, Determining Fair Value
When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying
Transactions That Are Not Orderly. FSP FAS 157-4 amends Statement 157 to provide additional guidance on
determining fair value when the volume and level of activity for the asset or liability have significantly
decreased when compared with normal market activity for the asset or liability. FSP FAS 157-4 is effective
for interim and annual reporting periods ending after June 15, 2009 with early adoption permitted for periods
ending after March 15, 2009. As described in Note 4, we have adopted Statement 157 and the related FASB
staff positions except for FSP No. FAS 157-4 and those items specifically deferred under FSP
No. FAS 157-2. We do not believe the full
87
Source: ORACLE CORP, 10-K, June 29, 2009 Powered by Morningstar® Document Research℠