US Cellular 2009 Annual Report Download - page 56

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UNITED STATES CELLULAR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING
PRONOUNCEMENTS (Continued)
Operating Leases
U.S. Cellular is a party to various lease agreements for office space, retail sites, cell sites and equipment
that are accounted for as operating leases. Certain leases have renewal options and/or fixed rental
increases. Renewal options that are reasonably assured of exercise are included in determining the lease
term. U.S. Cellular accounts for certain operating leases that contain rent abatements, lease incentives
and/or fixed rental increases by recognizing lease revenue and expense on a straight-line basis over the
lease term.
Recent Accounting Pronouncements
In June 2009, the FASB issued an update to accounting standards now reflected in FASB ASC 810,
Consolidation. Subsequently, in December 2009, the FASB issued Accounting Standards Update
No. 2009-17, Consolidations (Topic 810)—Improvements to Financial Reporting by Enterprises Involved
with Variable Interest Entities (‘‘ASU 2009-17’’) to formally codify such update. The revised guidance
changes how U.S. Cellular determines when an entity that is insufficiently capitalized or is not controlled
through voting or similar rights should be consolidated. U.S. Cellular has interests in several entities
within the scope of these requirements (see Note 6—Variable Interest Entities). U.S. Cellular adopted this
accounting standards update effective January 1, 2010. U.S. Cellular anticipates that the adoption of this
pronouncement will not have a significant impact on its financial position or results of operations.
In October 2009, the FASB issued Accounting Standards Update No. 2009-13, Multiple Deliverable
Revenue Arrangements—a consensus of FASB Emerging Issues Task Force (‘‘ASU 2009-13’’).
ASU 2009-13 addresses how arrangement consideration should be allocated to products and services
included in revenue arrangements. It replaces ‘‘fair value’’ with ‘‘selling price’’ in revenue allocation
guidance and establishes a selling price hierarchy for determining the selling price of each product or
service. ASU 2009-13 will be effective for U.S. Cellular on January 1, 2011. U.S. Cellular does not
anticipate that this pronouncement will have a significant impact on its financial position or results of
operations
In October 2009, the FASB issued Accounting Standards Update No. 2009-14, Certain Revenue
Arrangements that include Software Elements (‘‘ASU 2009-14’’). ASU 2009-14 amends accounting and
reporting guidance for revenue arrangements involving both tangible products and software that is ‘‘more
than incidental to the tangible product as a whole’’. ASU 2009-14 will be effective for U.S. Cellular on
January 1, 2011. U.S. Cellular does not anticipate that this pronouncement will have a significant impact
on its financial position or results of operations.
In January 2010, the FASB issued Accounting Standards Update No. 2010-06, Improving Disclosures
about Fair Value Measurements (‘‘ASU 2010-06’’). ASU 2010-06 requires new disclosures regarding
transfers in and out of Levels 1 and 2 and activity in Level 3 fair value measurements. It also clarifies
existing disclosure requirements regarding the level of disaggregation in certain disclosures and inputs
and valuation techniques used in FASB ASC 820, Fair Value Measurements and Disclosures. U.S. Cellular
adopted this accounting standards update effective January 1, 2010 for all the disclosure requirements in
ASU 2010-06 except the new requirement regarding activity in Level 3 fair value measurements which
becomes effective for U.S. Cellular on January 1, 2011. U.S. Cellular does not anticipate that this
pronouncement will have a significant impact on its financial position or results of operations.
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