PACCAR 2011 Annual Report Download - page 57

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2011, 2010 and 2009 (currencies in millions)
Earnings per Share: Basic earnings per common share are computed by dividing earnings by the weighted average
number of common shares outstanding, plus the effect of any participating securities. Diluted earnings per common
share are computed assuming that all potentially dilutive securities are converted into common shares under the treasury
stock method. The dilutive and antidilutive options are shown separately in the table below.
Year Ended December 31, 2011 2010 2009
Additional shares 1,173,000 1,339,300 1,103,600
Antidilutive options 1,249,800 1,642,600 2,290,400
New Accounting Pronouncements: In April 2011, the Financial Accounting Standards Board (FASB) issued Accounting
Standards Update (ASU) 2011-02, A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt
Restructuring. ASU 2011-02 gives additional guidance to companies to assist in determining troubled debt restructurings.
The Company adopted ASU 2011-02 in the third quarter of 2011; the implementation of this amendment resulted in
additional disclosure (see Note D) but did not have a significant impact on the Company’s consolidated financial
statements.
In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common
Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. While many of the amendments are
clarifications to the existing guidance and are intended to align U.S. GAAP and IFRS, the ASU changes some fair value
measurement principles and disclosure requirements. ASU 2011-04 is effective for interim and annual periods beginning
after December 15, 2011. The Company is evaluating the impact of the ASU on its consolidated financial statements.
The FASB issued ASU 2011-05, Presentation of Comprehensive Income, subsequently amended by ASU 2011-12
in December 2011. This new guidance is effective for fiscal years, including interim periods, beginning after
December 15, 2011. The new guidance requires entities to present components of net income and other comprehensive
income in either a combined financial statement or in two separate but consecutive statements of net income and
other comprehensive income. The Company is currently evaluating which method to adopt as required in 2012.
In September 2011, the FASB issued ASU 2011-08 amending the guidance on testing goodwill for impairment. This
amendment allows an entity to first assess qualitative factors to determine whether it is necessary to perform the
two-step quantitative impairment test. ASU 2011-08 is effective for fiscal years beginning after December 15, 2011
with early adoption permitted. The Company early adopted ASU 2011-08 in the fourth quarter of 2011 with no
impact on the Company’s consolidated financial statements.
In September 2011, the FASB issued ASU 2011-09, Employer Disclosure Requirements for Multiemployer Pension
Plans. This amendment requires employers participating in material multi-employer pension and other
postretirement benefit plans to provide additional quantitative and qualitative disclosures to give users more
detailed information about an employer’s involvement in multi-employer plans. The Company adopted
ASU 2011-09 in the fourth quarter of 2011; the implementation of this amendment resulted in additional
disclosures (see Note L), but did not have an impact on the Company’s consolidated financial statements.
In December 2011, the FASB issued ASU 2011-11, Disclosures about Offsetting Assets and Liabilities. The ASU requires
all entities with financial instruments and derivatives that are either offset on the balance sheet, or subject to a master
netting arrangement, to provide expanded disclosures about the nature of the rights of offset. ASU 2011-11 is effective
for annual periods beginning on or after January 1, 2013 and interim periods within those annual periods. The Company
will provide the expanded disclosures in 2013.