Snapple 2010 Annual Report Download - page 86

DR PEPPER SNAPPLE GROUP, INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Foreign Currency Translation
The functional currency of the Company’s operations outside the United States is generally the local currency of the country
where the operations are located. The balance sheets of operations outside the United States are translated into U.S. Dollars at the
end of year rates. As a result of information technology investments, the results of operations for 2010 and 2009 were translated
into U.S. Dollars at a monthly average rate, calculated using daily exchange rates. During 2008, the results of operations for the
fiscal year were translated into U.S. Dollars at an annual average rate, calculated using month end exchange rates.
The following table sets forth exchange rate information for the periods and currencies indicated:
Mexican Peso to U.S. Dollar Exchange Rate
2010
2009
2008
End of Year Rates
12.35
13.07
13.67
Annual Average
Rates
12.63
13.61
11.07
Canadian Dollar to U.S. Dollar Exchange Rate
2010
2009
2008
End of Year Rates
1.00
1.05
1.22
Annual Average
Rates
1.03
1.15
1.06
Differences on exchange arising from the translation of opening balance sheets of these entities to the rate ruling at the end
of the financial year are recognized in accumulated other comprehensive income. The exchange differences arising from the
translation of foreign results from the average rate to the closing rate are also recognized in accumulated other comprehensive
income. Such translation differences are recognized as income or expense in the period in which the Company disposes of the
operations.
Transactions in foreign currencies are recorded at the approximate rate of exchange at the transaction date. Assets and liabilities
resulting from these transactions are translated at the rate of exchange in effect at the balance sheet date. All such differences are
recorded in results of operations and amounted to $14 million, $19 million and $11 million during the years ended December 31,
2010, 2009 and 2008, respectively.
Recently Issued Accounting Standards
In January 2010, the Financial Accounting Standards Board (“FASB”)issued Accounting Standard Update (“ASU”) 2010-06,
Improving Disclosures about Fair Value Measurements (“ASU 2010-06”). The new standard addresses, among other things,
guidance regarding activity in Level 3 fair value measurements. Portions of ASU 2010-06 that relate to the Level 3 activity
disclosures are effective for the first interim or annual reporting period beginning after December 15, 2010. The Company will
provide the required disclosures beginning with the Company’s Quarterly Report on Form 10-Q for the period ending March 31,
2011. The Company does not anticipate a material impact to the Company’s financial position, results of operations or cash flows
as a result of this change.
Recently Adopted Accounting Standards
In accordance with U.S. GAAP, the following provisions, which had no material impact on the Company’s financial position,
results of operations or cash flows, were effective as of January 1, 2010.
• The application of certain key provisions of U.S. GAAP related to consolidation of variable interest entities, including
guidance for determining whether an entity is a variable interest entity, ongoing assessments of control over such entities,
and additional disclosures about an enterprise’s involvement in a variable interest entity.
• The addition of certain fair value measurement disclosure requirements specific to the different classes of assets and
liabilities, valuation techniques and inputs used, as well as transfers between Level 1 and Level 2. See Note 14 for further
information.
66