US Airways 2006 Annual Report Download - page 75

Table of Contents
Recent Accounting and Reporting Developments
In June 2006, the FASB ratified Emerging Issues Task Force Issue No. 06-3 ("EITF 06-3"), "How Taxes Collected from Customers
and Remitted to Governmental Authorities Should Be Presented in the Income Statement (That Is, Gross versus Net Presentation)." The
scope of EITF 06-3 includes any tax assessed by a governmental authority that is directly imposed on a revenue-producing transaction
between a seller and a customer. This issue provides that a company may adopt a policy of presenting taxes either gross within revenue or
net. If taxes subject to this issue are significant, a company is required to disclose its accounting policy for presenting taxes and the
amount of such taxes that are recognized on a gross basis. This statement is effective to financial reports for interim and annual reporting
periods beginning after December 15, 2006. We adopted EITF 06-3 on January 1, 2007. We collect various excise taxes on our ticket
sales, which are accounted for on a net basis. The adoption of EITF 06-3 will not have a material impact on our consolidated financial
statements.
In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements." This standard defines fair value, establishes a
framework for measuring fair value in accounting principles generally accepted in the United States of America, and expands disclosure
about fair value measurements. This pronouncement applies to other accounting standards that require or permit fair value measurements.
Accordingly, this statement does not require any new fair value measurement. This statement is effective for fiscal years beginning after
November 15, 2007, and interim periods within those fiscal years. US Airways Group will be required to adopt SFAS No. 157 in the first
quarter of fiscal year 2008. Management is currently evaluating the requirements of SFAS No. 157 and has not yet determined the impact
on US Airways Group's consolidated financial statements.
Effective December 31, 2006, we adopted the recognition provisions of SFAS No. 158, "Employers' Accounting for Defined
Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106, and 132(R)." This statement
requires employers to recognize in their balance sheets the overfunded or underfunded status of defined benefit post-retirement plans,
measured as the difference between the fair value of plan assets and the benefit obligation (the projected benefit obligation for pension
plans and the accumulated postretirement benefit obligation for other postretirement plans). Employers must recognize the change in the
funded status of the plan in the year in which the change occurs through other comprehensive income.
Prior to the adoption of the recognition provisions of SFAS No. 158, we accounted for our defined benefit pension and
postretirement benefit plans under SFAS No. 87, "Employers Accounting for Pensions" and SFAS No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions." SFAS No. 87 required that a liability (minimum pension liability) be recorded when the
accumulated benefit obligation (ABO) liability exceeded the fair value of plan assets. Any adjustment is recorded as a non-cash charge to
accumulated other comprehensive income in stockholders' equity. SFAS No. 106 required that the liability recorded should represent the
actuarial present value of all future benefits attributable to an employees' service rendered to date. Under both SFAS No. 87 and No. 106,
changes in the funded status were not immediately recognized; rather they were deferred and recognized ratably over future periods.
Upon adoption of the recognition provisions of SFAS No. 158, we recognized the amounts of prior changes in the funded status of our
post-retirement benefit plans through accumulated other comprehensive income. As a result, we recognized the following adjustments in
individual line items of our consolidated balance sheets as of December 31, 2006:
Prior to Adoption Effect of Adopting As Reported at
of SFAS No. 158 SFAS No. 158 Dec. 31, 2006
Pension liabilities $ 16 $ (2) $ 14
Postretirement benefits other than pensions 216 (1) 215
Total liabilities 232 (3) 229
Accumulated other comprehensive income — 3 3
Total Stockholders' equity 967 3 970
The adoption of the recognition provision of SFAS No. 158 had no effect on our consolidated statements of operations for the year
ended December 31, 2006 or for any prior period presented.
This statement also requires plan assets and obligations to be measured as of the employer's balance sheet date. The measurement
provisions of this statement will be effective for years beginning after December 15, 2008. We
72