Quest Diagnostics 2013 Annual Report Download - page 86

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F- 14
New Accounting Standards
In March 2013, the FASB issued a new accounting standard on foreign currency matters that clarifies the guidance of a
parent company's accounting for the cumulative translation adjustment upon derecognition of certain subsidiaries or groups of
assets within a foreign entity or of an investment in a foreign entity. Under this new standard, a parent company that ceases to
have a controlling financial interest in a foreign subsidiary or group of assets within a foreign entity shall release any related
cumulative translation adjustment into net income only if a sale or transfer results in complete or substantially complete
liquidation of the foreign entity. This standard shall be applied prospectively and will become effective for the Company on
January 1, 2014. The Company expects that the adoption of this standard will not have a material effect on its consolidated
financial statements.
In July 2013, the FASB issued a new accounting standard to permit the use of the Fed Funds Effective Swap Rate to be
used as an alternative benchmark interest rate for hedge accounting purposes in interest rate derivatives. The new standard is
effective prospectively for qualifying new or redesignated hedging relationships entered into on or after July 17, 2013. The
new standard did not have a material effect on the Company's consolidated financial statements.
In July 2013, the FASB issued a new accounting standard on the financial statement presentation of unrecognized tax
benefits. The new standard provides that a liability related to an unrecognized tax benefit would be presented as a reduction of
a deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward if such settlement is
required or expected in the event the uncertain tax position is disallowed. The new standard becomes effective for the
Company on January 1, 2014 and it should be applied prospectively to unrecognized tax benefits that exist at the effective date
with retrospective application permitted. The Company expects that the adoption of this standard will not have a material effect
on its consolidated financial statements.
QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED
(in millions unless otherwise indicated)