Time Warner Cable 2008 Annual Report Download - page 104

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Accounting for Postretirement Benefit Aspects of Split-Dollar Life Insurance Arrangements
On January 1, 2008, the Company adopted the provisions of EITF Issue No. 06-10, Accounting for Collateral
Assignment Split-Dollar Life Insurance Arrangements (“EITF 06-10”), which requires that a company recognize a
liability for the postretirement benefits associated with endorsement and collateral assignment split-dollar life
insurance arrangements. The provisions of EITF 06-10 are applicable in instances where the Company has
contractually agreed to maintain a life insurance policy (i.e., the Company pays the premiums) for an employee in
periods in which the employee is no longer providing services. The adoption of EITF 06-10 did not have a material
impact on the Company’s consolidated financial statements.
Fair Value Measurements
On January 1, 2008, the Company adopted certain provisions of FASB Statement of Financial Accounting
Standards (“Statement”) No. 157, Fair Value Measurements (“FAS 157”), which establishes the authoritative
definition of fair value, sets out a framework for measuring fair value and expands the required disclosures about
fair value measurement. The provisions of FAS 157 adopted on January 1, 2008 relate to financial assets and
liabilities, as well as other assets and liabilities carried at fair value on a recurring basis and did not have a material
impact on the Company’s consolidated financial statements. The provisions of FAS 157 related to other nonfi-
nancial assets and liabilities will be effective for TWC on January 1, 2009, and will be applied prospectively. These
provisions are not expected to have any impact on the Company’s historical consolidated financial statements.
Accounting Standards Not Yet Adopted
Determining Whether Instruments Granted in Share-Based Payment Transactions are Participating Securities
In June 2008, the FASB issued Staff Position (“FSP”) EITF Issue No. 03-6-1, Determining Whether
Instruments Granted in Share-Based Payment Transactions Are Participating Securities (“FSP EITF 03-6-1”),
in which the FASB concluded that all outstanding unvested share-based payment awards that contain rights to
nonforfeitable dividends or dividend equivalents (such as restricted stock units granted by the Company) are
considered participating securities. Because the awards are considered participating securities, the issuing entity is
required to apply the two-class method of computing basic and diluted earnings per share. The provisions of FSP
EITF 03-6-1 will be effective for TWC on January 1, 2009 and will be applied retrospectively to all prior-period
earnings per share computations. The adoption of FSP EITF 03-6-1 is not expected to have a material impact on
earnings per share amounts in prior periods.
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 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. In addition, FAS 141R requires that changes in
the amount of acquired tax attributes be included in the Company’s results of operations. FAS 141R will be effective
for TWC on January 1, 2009 and will be applied prospectively to business combinations that have an acquisition
date on or after January 1, 2009. While FAS 141R applies only to business combinations with an acquisition date
after its effective date, the amendments to FASB Statement No. 109, Accounting for Income Taxes (“FAS 109”),
with respect to deferred tax asset valuation allowances and liabilities for income tax uncertainties, will be applied to
all deferred tax valuation allowances and liabilities for income tax uncertainties recognized in prior business
combinations. The provisions of FAS 141R will not impact the Company’s consolidated financial statements for
prior periods.
94
TIME WARNER CABLE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)