Sears 2009 Annual Report Download - page 65

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SEARS HOLDINGS CORPORATION
Notes to Consolidated Financial Statements—(Continued)
share of net assets acquired be recorded at the fair value, plus its share of goodwill. The provisions of the new
standard were prospective upon adoption, except for the presentation and disclosure requirements. The
presentation and disclosure requirements must be applied retrospectively for all periods presented. Accordingly,
our consolidated balance sheet as of January 31, 2009, our consolidated statements of income for the fiscal years
ended January 31, 2009 and February 2, 2008, and consolidated statements of cash flows and consolidated
statements of equity for the fiscal years ended January 31, 2009 and February 2, 2008 have been retrospectively
adjusted to reflect noncontrolling interests in Sears Canada and OSH (which represent 27% and 19.9% of the
subsidiaries’ ownership, respectively), and include adjustments to reclassify $319 million and $313 million from
other long-term liabilities to equity as of January 31, 2009 and February 2, 2008, respectively.
Disclosures about Derivative Instruments
In March 2008, the FASB issued a new standard regarding disclosures about derivative instruments and
hedging activities. We adopted the new standard on February 1, 2009. The standard supplements previously
required disclosures with additional qualitative and quantitative information, including information regarding our
use of derivatives and the effects derivative positions have on our earnings. See information in Note 1 and Note 4
to the Consolidated Financial Statements for further discussion required by this new standard.
Disclosures about Fair Value Measurements
In January 2010, the FASB issued an accounting standards update to improve disclosures about fair value
measurements.The update amends existing accounting rules regarding fair value measurements and disclosures
to add new requirements for disclosures related to transfers into and out of investment Levels 1 and 2, and
separate disclosures about purchases, sales, issuances, and settlements relating to Level 3 investment
measurements. It also clarifies existing fair value disclosures about the level of disaggregation, as well as inputs
and valuation techniques used to measure fair value. The update is effective for the first reporting period
beginning after December 15, 2009, except for the requirement to provide the Level 3 activity of purchases,
sales, issuances, and settlements on a gross basis, which will be effective for fiscal years beginning after
December 15, 2010. As this update only relates to financial statement disclosures, we do not expect it will have
an impact on our results of operations, cash flows or financial positions.
Subsequent Events
During the second quarter of fiscal 2009, we adopted a newly issued accounting standard for subsequent
events. The new standard incorporates the principles and accounting guidance for recognizing and disclosing
subsequent events that originated as auditing standards into the body of authoritative literature issued by the
FASB and also prescribes disclosure regarding the date through which subsequent events have been evaluated.
We are required to evaluate subsequent events through the date our financial statements are issued. In February
2010, the FASB amended this new standard to eliminate the disclosure requirement regarding the date through
which subsequent events have been evaluated. As the new standard was not intended to significantly change the
current practice of reporting subsequent events, it did not have an impact on our results of operations, cash flows
or financial positions.
NOTE 2—ACQUISITION OF NONCONTROLLING INTEREST IN SEARS CANADA
During fiscal 2009, we increased our controlling interest in Sears Canada by acquiring approximately
0.5 million common shares in open market transactions. We paid a total of $7 million for the additional shares
and accounted for the acquisition of additional interest in Sears Canada as an equity transaction in accordance
with a newly issued accounting standard on noncontrolling interests (see Note 1 for further information on this
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