US Airways 2008 Annual Report Download - page 143

Table of Contents
US Airways, Inc.
Notes to Consolidated Financial Statements — (Continued)
which had no effect on US Airways' consolidated financial statements. Refer to Note 6 for additional information related to the adoption
of SFAS No. 157.
In December 2007, the FASB issued SFAS No. 141 (Revised 2007), "Business Combinations." SFAS No. 141R is effective for
fiscal years beginning after December 15, 2008 and adjusts certain guidance related to recording nearly all transactions where one
company gains control of another. The statement revises the measurement principle to require fair value measurements on the acquisition
date for recording acquired assets and liabilities. It also changes the requirements for recording acquisition-related costs and liabilities.
Additionally, the statement revises the treatment of valuation allowance adjustments related to income tax benefits in existence prior to a
business combination. The current standard, SFAS No. 141, requires that adjustments to these valuation allowances be recorded as
adjustments to goodwill or intangible assets if no goodwill exists, while the new standard will require companies to adjust current income
tax expense. Effective January 1, 2009, US Airways adopted the provisions of SFAS No. 141R and all future decreases in the valuation
allowance established in purchase accounting as a result of the merger will be recognized as a reduction to income tax expense.
On January 1, 2008, US Airways adopted the measurement date 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)." The measurement
date provisions require plan assets and obligations to be measured as of the employer's balance sheet date. US Airways previously
measured its other postretirement benefit obligations as of September 30 each year. As a result of the adoption of the measurement date
provisions, US Airways recorded a $2 million increase to its postretirement benefit liability and a $2 million increase to accumulated
deficit, representing the net periodic benefit cost for the period between the measurement date utilized in 2007 and the beginning of 2008.
The adoption of the measurement provisions of SFAS No. 158 had no effect on US Airways' consolidated statements of operations.
In October 2008, the FASB issued FASB Staff Position ("FSP") FAS 157-3, "Determining the Fair Value of a Financial Asset
When the Market for That Asset Is Not Active." FSP FAS 157-3 clarifies the application of SFAS No. 157 in a market that is not active
and provides an example to illustrate key considerations in determining the fair value of a financial asset when the market for that
financial asset is not active. FSP FAS 157-3 is effective upon issuance, including prior periods for which financial statements have not
been issued. Revisions resulting from a change in the valuation technique or its application should be accounted for as a change in
accounting estimate following the guidance in SFAS No. 154, "Accounting Changes and Error Corrections." FSP FAS 157-3 is effective
October 10, 2008, and the application of FSP FAS 157-3 had no impact on US Airways' consolidated financial statements.
2. Special items, net
Special items, net as shown on the consolidated statements of operations include the following charges (credits) (in millions):
Year Ended December 31,
2008 2007 2006
Merger related transition expenses(a) $ 35 $ 99 $ 131
Asset impairment charges(b) 18 — —
Lease return costs and penalties(c) 14 — —
Severance charges(d) 9 — —
Airbus restructuring(e) — — (90)
Settlement of bankruptcy claims(f) — — (3)
Total $ 76 $ 99 $ 38
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