US Airways 2007 Annual Report Download - page 137

Table of Contents
US Airways, Inc.
Notes to Consolidated Financial Statements — (Continued)
agreements covering the flight crew training instructors and the flight simulator engineers, each represented by the Transport Workers
Union ("TWU").
(b) Basis of Presentation
The transfer of assets between US Airways and AWA described above constitutes a transfer of assets between entities under
common control and was accounted for in a manner similar to the pooling of interests method of accounting. Under this method, the
carrying amount of net assets recognized in the balance sheets of each combining entity are carried forward to the balance sheet of the
combined entity, and no other assets or liabilities are recognized as a result of the contribution of shares. The accompanying consolidated
financial statements in this annual report on Form 10-K are presented as though the transfer had occurred at the time of US Airways
emergence from bankruptcy. Therefore, the Successor Company consolidated statement of operations, cash flows, and stockholder's
equity for US Airways for the three month period ended December 31, 2005 in this report is comprised of the results of US Airways and
America West Holdings. The Predecessor Company statement of operations, cash flows, and stockholder's equity for US Airways for the
nine month period ended September 30, 2005 remains unchanged.
The accompanying consolidated financial statements include the accounts of US Airways and its wholly owned subsidiaries. US
Airways Group has the ability to move funds freely between its operating subsidiaries to support operations. These transfers are
recognized as intercompany transactions. In the accompanying consolidated statements of cash flows, these intercompany transactions
are designated as payable to affiliate and are classified as financing activities as US Airways Group has no plans to settle these
transactions in the near term. All significant intercompany accounts and transactions between US Airways and US Airways' subsidiaries
have been eliminated in consolidation.
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. The principal areas of judgment relate to passenger revenue
recognition, impairment of goodwill, impairment of long-lived and intangible assets and the frequent traveler program.
(c) Cash Equivalents
Cash equivalents consist primarily of cash in money market securities of various banks, highly liquid debt instruments, commercial
paper and asset-backed securities of various financial institutions and securities backed by the U.S. government. All highly liquid
investments purchased within three months of maturity are classified as cash equivalents. Cash equivalents are stated at cost, which
approximates fair value due to the highly liquid nature and short maturities of the underlying securities.
(d) Investments in Marketable Securities
All other highly liquid investments with original maturities greater than three months but less than one year are classified as current
investments in marketable securities. Investments in marketable securities classified as noncurrent assets on US Airways' balance sheet
represent investments expected to be converted to cash after 12 months. Debt securities, other than auction rate securities, are classified
as held to maturity in accordance with Statement of Financial Accounting Standards ("SFAS") No. 115, "Accounting for Certain
Investments in Debt and Equity Securities" ("SFAS 115"). Held to maturity investments are carried at amortized cost. Investments in
auction rate securities are classified as available for sale. See Note 4(c) for more information on US Airways' investments in marketable
securities.
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