PNC Bank 2008 Annual Report Download - page 101

related guidance. This guidance was effective December 31,
2008 for PNC. The adoption of this guidance did not have a
material effect on our results of operations or financial
position.
In January 2009, the FASB issued proposed FSP FAS 107-b
and APB 28-a, “Interim Disclosures about Fair Value of
Financial Instruments”. This FSP would amend FASB
Statement No. 107, “Disclosures about Fair Value of Financial
Instruments, to require disclosures about fair value of financial
instruments in interim financial statements as well as in annual
financial statements. This FSP also would amend APB
Opinion No. 28, “Interim Financial Reporting”, to require
those disclosures in all interim financial statements. As
proposed, the disclosures would be effective for the quarter
ended March 31, 2009.
In December 2007, the FASB issued SFAS 141(R), “Business
Combinations.” This statement will require all businesses
acquired to be measured at the fair value of the consideration
paid as opposed to the cost-based provisions of SFAS 141. It
will require an entity to recognize the assets acquired, the
liabilities assumed, and any noncontrolling interest in the
acquiree at the acquisition date, measured at their fair values
as of that date. SFAS 141(R) requires the value of
consideration paid including any future contingent
consideration to be measured at fair value at the closing date
of the transaction. Also, restructuring costs and acquisition
costs are to be expensed rather than included in the cost of the
acquisition. This guidance is effective for all acquisitions with
closing dates after January 1, 2009.
In December 2007, the FASB issued SFAS 160, “Accounting
and Reporting of Noncontrolling Interests in Consolidated
Financial Statements, an amendment of ARB No. 51.” This
statement amends ARB No. 51 to establish accounting and
reporting standards for the noncontrolling interest in a
subsidiary and for the deconsolidation of a subsidiary. It
clarifies that a noncontrolling interest should be reported as
equity in the consolidated financial statements. This statement
requires expanded disclosures that identify and distinguish
between the interests of the parent’s owners and the interests
of the noncontrolling owners of an entity. This guidance is
effective January 1, 2009. We do not expect the adoption to
have a material impact on our consolidated financial
statements.
In May 2007, the FASB issued FSP FIN 48-1, “Definition of
Settlement in FASB Interpretation (“FIN”) No. 48.” This FSP
amended FIN 48, “Accounting for Uncertainty in Income
Taxes,” to provide guidance as to the determination of
whether a tax position is deemed effectively settled for
purposes of recognizing previously unrecognized tax benefits
under FIN 48. This guidance was adopted effective January 1,
2007 in connection with our adoption of FIN 48. See Note 21
Income Taxes for additional information.
During 2006, the FASB issued the following:
• SFAS 158, “Employers’ Accounting for Defined
Benefit Pension and Other Postretirement Plans – an
amendment of FASB Statements No. 87, 88, 106, and
132(R).” This statement affects the accounting and
reporting for our qualified pension plan, our
nonqualified retirement plans, our postretirement
welfare benefit plans and our post employment
benefit plan. SFAS 158 required recognition on the
balance sheet of the over- or underfunded position of
these plans as the difference between the fair value of
plan assets and the related benefit obligations
previously recognized on the balance sheet. The
difference, net of tax, was recorded as part of
accumulated other comprehensive income or loss
(“AOCI”) within the shareholders’ equity section of
the balance sheet. This guidance also required the
recognition of any unrecognized actuarial gains and
losses and unrecognized prior service costs to AOCI,
net of tax. SFAS 158 was effective for PNC as of
December 31, 2006, with no restatement for prior
year-end reporting periods permitted. The impact of
adoption of SFAS 158 at December 31, 2006 was a
reduction of AOCI of $132 million after tax.
• FIN 48 “Accounting for Uncertainty in Income Taxes
– an Interpretation of FASB Statement No. 109,”
clarifies the accounting for uncertainty in income
taxes recognized in the financial statements and sets
forth recognition, derecognition and measurement
criteria for tax positions taken or expected to be taken
in a tax filing. For PNC, this guidance was effective
for all tax positions taken or expected to be taken
beginning on January 1, 2007. See Note 19 Income
Taxes for additional information.
• FSP FAS 13-2, “Accounting for a Change or
Projected Change in the Timing of Cash Flows
Relating to Income Taxes Generated by a Leveraged
Lease Transaction,” requires a recalculation of the
timing of income recognition for a leveraged lease
under SFAS 13, “Accounting for Leases,” when a
change in the timing of income tax deductions
directly related to the leveraged lease transaction
occurs or is projected to occur. Any tax positions
taken regarding the leveraged lease transaction must
be recognized and measured in accordance with FIN
48 described above. This guidance was effective for
PNC beginning January 1, 2007 with the cumulative
effect of applying the provisions of this FSP being
recognized through an adjustment to opening retained
earnings. Any immediate or future reductions in
earnings from the change in accounting would be
recovered in subsequent years. Our adoption of the
guidance in FSP FAS 13-2 resulted in an after-tax
charge to beginning retained earnings at January 1,
2007 of approximately $149 million.
97