United Airlines 2007 Annual Report Download - page 103

UAL Corporation and Subsidiary Companies
Combined Notes to Consolidated Financial Statements (Continued)
(2) Summary of Significant Accounting Policies (Continued)
(o) Ticket Taxes—Certain governmental taxes are imposed on United's ticket sales through a fee included in ticket prices. United collects these fees and
remits them to the appropriate government agency. These fees are recorded on a net basis (excluded from operating revenues).
(p) New Accounting Pronouncements—In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, Fair Value
Measurements ("SFAS 157"), which defines fair value, establishes a framework for measuring fair value, and expands disclosure about fair value measurements.
SFAS 157 does not require any new fair value measurements; rather it specifies valuation methods and disclosures to be applied when fair value measurements
are required under existing or future accounting pronouncements. As originally issued, SFAS 157 is effective for fiscal years beginning January 1, 2008. The
Company does not expect the adoption of SFAS 157 with respect to its financial assets and financial liabilities to have a material impact on its results of
operations or financial position.
In February 2008, the FASB issued FASB Staff Position ("FSP") No. FAS 157-b. This FSP delayed the effective date of SFAS 157 for all nonfinancial
assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis, until periods
beginning January 1, 2009. The Company is currently evaluating the impact of SFAS 157 on the reporting and disclosure of its nonfinancial assets and
nonfinancial liabilities.
In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, The Fair Value Option for Financial Assets and Financial
Liabilities Including an amendment of FASB Statement No. 115 ("SFAS 159"). This statement permits entities to choose to measure many financial instruments
and certain other items at fair value that are not currently required to be measured at fair value. The objective of SFAS 159 is to improve financial reporting by
providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to
apply complex hedge accounting provisions. SFAS 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between
entities that choose different measurement attributes for similar types of assets and liabilities. This statement does not affect any existing accounting literature
that requires certain assets and liabilities to be carried at fair value. This statement is effective for the Company as of January 1, 2008. The Company did not elect
to apply the provisions of SFAS 159 to any of its existing financial assets or financial liabilities at January 1, 2008.
In December 2007, the FASB issued Statement of Financial Accounting Standards No. 141 (revised 2007), Business Combinations ("SFAS 141R"). This
statement replaces Statement of Financial Accounting Standards No. 141, Business Combinations. SFAS 141R retains the fundamental requirements in
Statement No. 141 that the acquisition method of accounting be used for all business combinations and for an acquirer to be identified for each business
combination. In addition, SFAS 141R provides new guidance intended to improve reporting by creating greater consistency in the accounting and financial
reporting of business combinations, resulting in more complete, comparable, and relevant information for investors and other users of financial statements.
SFAS 141R is effective for the Company for any business combinations with an acquisition date on or after January 1, 2009. The Company will apply the
provisions of SFAS 141R to any business combinations within the scope of SFAS 141R after its effective date. In accordance with the provisions of SFAS 141R
that amended SFAS 109, beginning January 1, 2009, the Company will be required to recognize any changes in the valuation allowance for deferred tax assets,
which was established as part of fresh-start reporting, to be recognized as an adjustment to income tax expense. This reflects a change from current practice
which
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Source: UNITED AIR LINES INC, 10-K, February 29, 2008