U-Haul 2011 Annual Report Download - page 69

AMERCO AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
constant percentage of revenue. For its annuity insurance products the costs are amortized, with interest, in
relation to the present value of actual and expected gross profits. For Repwest, these costs are amortized over
the related contract periods, which generally do not exceed one year.
Environmental Costs
Liabilities are recorded when environmental assessments and remedial efforts, if applicable, are probable
and the costs can be reasonably estimated. The amount of the liability is based on management’s best estimate
of undiscounted future costs. Certain recoverable environmental costs related to the removal of underground
storage tanks or related contamination are capitalized and amortized over the estimated useful lives of the
properties. These costs improve the safety or efficiency of the property or are incurred in preparing the property
for sale.
Income Taxes
AMERCO files a consolidated tax return with all of its legal subsidiaries, except for Dallas General Life
Insurance Company (“DGLIC”), a subsidiary of Oxford, which will file on a stand alone basis until 2012. In
accordance with ASC 740 - Income Taxes (“ASC 740”), the provision for income taxes reflects deferred income
taxes resulting from changes in temporary differences between the tax basis of assets and liabilities and their
reported amounts in the financial statements.
Comprehensive Income (Loss)
Comprehensive income (loss) consists of net earnings, foreign currency translation adjustments, unrealized
gains and losses on investments, the change in fair value of cash flow hedges and the change in postretirement
benefit obligation.
Adoption of New Accounting Pronouncements
Accounting Standards Update (“ASU”) 2009-16 formally incorporates into the FASB Codification
amendments to Statements of Financial Accounting Standards (“SFAS”) 140 made by SFAS 166 primarily to (1)
eliminate the concept of a qualifying special-purpose entity, (2) limit the circumstances under which a financial
asset (or portion thereof) should be derecognized when the entire financial asset has not been transferred to a
non-consolidated entity, (3) require additional information to be disclosed concerning a transferor's continuing
involvement with transferred financial assets, and (4) require that all servicing assets and servicing liabilities be
initially measured at fair value. The Company adopted the amendments to ASC 860-10 and ASC 860-50 in the
first quarter of fiscal 2011 and they did not have a material impact on our financial statements.
ASU 2009-17 formally incorporates into the FASB Codification amendments to FIN 46(R) made by SFAS
167 to require that a comprehensive qualitative analysis be performed to determine whether a holder of variable
interests in a variable interest entity also has a controlling financial interest in that entity. In addition, the
amendments require that the same type of analysis be applied to entities that were previously designated as
qualified special-purpose entities. The Company adopted the amendments to ASC 810-10 in the first quarter of
fiscal 2011 and it did not have a material impact on our financial statements.
ASU 2010-06 formally incorporates into the FASB Codification amendments to SFAS 157. Entities will be
required to provide enhanced disclosures about transfers in and out of Level 1 and 2 fair value classifications
and separate disclosures about purchases, sales, issuances and settlements relating to the Level 3 fair value
classification. The new guidance also clarifies existing fair value disclosures regarding the level of
disaggregation of assets or liabilities and the valuation techniques and inputs used to measure fair value. The
Company adopted the amendments to ASC 820-10 for Level 1 and 2 disclosures and for Level 3 disclosures in
the first quarter of fiscal 2011 and they did not have a material impact on our financial statements.
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