Proctor and Gamble 2012 Annual Report Download - page 57
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Amounts in millions of dollars except per share amounts or as otherwise specified.
intangible assets with determinable lives are amortized over
periods generally ranging from 5 to 30 years. When certain
events or changes in operating conditions occur, an
impairment assessment is performed and remaining lives of
intangible assets with determinable lives may be adjusted.
Fair Values of Financial Instruments
Certain financial instruments are required to be recorded at
fair value. Changes in assumptions or estimation methods
could affect the fair value estimates; however, we do not
believe any such changes would have a material impact on
our financial condition, results of operations or cash flows.
Other financial instruments, including cash equivalents,
other investments and short-term debt, are recorded at cost,
which approximates fair value. The fair values of long-term
debt and financial instruments are disclosed in Note 5.
New Accounting Pronouncements and Policies
Other than as described below, no new accounting
pronouncement issued or effective during the fiscal year has
had or is expected to have a material impact on the
Consolidated Financial Statements.
In June 2011, the Financial Accounting Standards Board
(FASB) issued authoritative guidance that will eliminate the
option of presenting components of OCI as part of the
statement of shareholders' equity. The guidance will instead
require the reporting of OCI in a single continuous statement
of comprehensive earnings or in a separate statement
immediately following the statement of earnings. The
standard is effective for the Company as of July 1, 2012 and
will impact our financial statement presentation, but will not
impact our results of operations, cash flows or financial
condition.
NOTE 2
GOODWILL AND INTANGIBLE ASSETS
The change in the net carrying amount of goodwill by reportable segment was as follows:
Beauty Grooming
Health
Care
Fabric Care
and Home
Care
Baby Care
and Family
Care Corporate
Total
Company
GOODWILL at JUNE 30, 2010 $ 16,631 $ 21,328 $ 7,859 $ 6,360 $ 1,445 $ 389 $ 54,012
Acquisitions and divestitures (7) (7)(7) 115 (1) 11 104
Translation and other 1,415 1,329 327 260 109 6 3,446
GOODWILL at JUNE 30, 2011 18,039 22,650 8,179 6,735 1,553 406 57,562
Acquisitions and divestitures (3) (12) 474 34 — (92) 401
Goodwill impairment charges (431) (899)— — — —
(1,330)
Translation and other (1,176) (1,059)(314)(212)(94)(5)(2,860)
GOODWILL at JUNE 30, 2012 16,429 20,680 8,339 6,557 1,459 309 53,773
On May 31, 2012, the Company sold the global snacks
business. As a result, the Snacks and Pet Care segment was
eliminated. The snacks goodwill prior to the divestiture date
is included in the Corporate segment and the pet care
goodwill is included in the Fabric Care and Home Care
segment for all periods presented.
During the second quarter of fiscal 2012, we changed our
annual goodwill impairment testing date from July 1 to
October 1 of each year. This change was made to better align
the timing of our annual impairment testing with the timing
of the Company's annual strategic planning process. We
believe this change is preferable because it allows us to more
efficiently utilize the reporting units' long-term financial
projections, which are generated from the annual strategic
planning process, as the basis for performing our annual
impairment testing. This change did not result in any delay,
acceleration or avoidance of impairment, nor did this change
result in adjustments to previously issued financial
statements. This change was applied prospectively
beginning on October 1, 2011; retrospective application to
prior periods was impracticable as the Company was unable
to objectively determine, without the use of hindsight, the
assumptions that would have been used in those earlier
periods. We test our indefinite-lived intangibles for
impairment during the second fiscal quarter of each year,
and accordingly performed this testing during the quarter
ended December 31, 2011.
We tested goodwill for impairment as of July 1, 2011 (the
testing date under our previous policy) and no impairments
were indicated. Our goodwill impairment testing as of
October 1, 2011 (the testing date under our new policy)
determined that certain goodwill was impaired. Specifically,
the results of our impairment testing during the quarter
ended December 31, 2011 indicated that the estimated fair
values of our Appliances and Salon Professional reporting
units were less than their respective carrying amounts. The
test to evaluate goodwill for impairment is a two-step
process. In the first step, we compare the estimated fair