Time Warner Cable 2007 Annual Report Download - page 90

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Recent Accounting Standards Not Yet Adopted
Consideration Given by a Service Provider to Manufacturers or Resellers of Equipment
In September 2006, the EITF reached a consensus on EITF Issue No. 06-1, Accounting for Consideration
Given by a Service Provider to Manufacturers or Resellers of Equipment Necessary for an End-Customer to
Receive Service from the Service Provider (“EITF 06-1”). EITF 06-1 provides that consideration provided to the
manufacturers or resellers of specialized equipment should be accounted for as a reduction of revenue if the
consideration provided is in the form of cash and the service provider directs that such cash be provided directly to
the customer. Otherwise, the consideration should be recorded as an expense. The provisions of EITF 06-1 will be
effective for TWC on January 1, 2008 and are not expected to have a material impact on the Company’s
consolidated financial statements.
Fair Value Measurements
In September 2006, the FASB issued Statement of Financial Accounting Standards (“Statement”) No. 157,
Fair Value Measurements (“FAS 157”). FAS 157 establishes a single authoritative definition of fair value, sets out a
framework for measuring fair value and expands on required disclosures about fair value measurement. Certain
provisions of FAS 157 related to financial assets and liabilities as well as other assets and liabilities carried at fair
value on a recurring basis became effective for TWC on January 1, 2008 and are being applied prospectively. These
provisions of FAS 157 are not expected to have any impact on the Company’s consolidated financial statements.
The provisions of FAS 157 related to other nonfinancial assets and liabilities will be effective for TWC on January 1,
2009, and will be applied prospectively. The Company is currently evaluating the impact the provisions of FAS 157
will have on the Company’s consolidated financial statements as it relates to other nonfinancial assets and
liabilities.
Business Combinations
In December 2007, the FASB issued Statement No. 141 (revised 2007), Business Combinations (“FAS 141R”).
FAS 141R establishes principles and requirements for how an acquirer in a business combination (i) recognizes and
measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling
interest in the acquiree, (ii) recognizes and measures the goodwill acquired in a business combination or a gain from
a bargain purchase, and (iii) determines what information to disclose to enable users of financial statements to
evaluate the nature and financial effects of the business combination. FAS 141R will be applied prospectively to
business combinations that have an acquisition date on or after January 1, 2009. The provisions of FAS 141R will
not impact the Company’s consolidated financial statements for prior periods.
Noncontrolling Interests
In December 2007, the FASB issued Statement No. 160, Noncontrolling Interests in Consolidated Financial
Statements—an amendment of ARB No. 51 (“FAS 160”). The provisions of FAS 160 establish accounting and
reporting standards for the noncontrolling interest in a subsidiary, including the accounting treatment upon the
deconsolidation of a subsidiary. The provisions of FAS 160 will be effective for TWC on January 1, 2009 and will be
applied prospectively, except for the presentation of the noncontrolling interests, which for all prior periods would
be reclassified to equity in the consolidated balance sheet and adjusted out of net income in the consolidated
statement of operations. The Company is currently evaluating the impact the provisions of FAS 160 will have on the
Company’s consolidated financial statements.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and Equivalents
Cash and equivalents include money market funds, overnight deposits and other investments that are readily
convertible into cash and have original maturities of three months or less. Cash equivalents are carried at cost, which
approximates fair value.
85
TIME WARNER CABLE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)