Vectren 2008 Annual Report Download - page 51

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49
SFAS 160
In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial
Statements-an Amendment of ARB No. 51” (SFAS 160). SFAS 160 establishes accounting and reporting standards
that require that the ownership percentages in subsidiaries held by parties other than the parent be clearly identified,
labeled, and presented separately from the parent’s equity in the equity section of the consolidated balance sheet;
the amount of consolidated net income attributable to the parent and the noncontrolling interest to be clearly
identified and presented on the face of the consolidated income statement; that changes in the parent’s ownership
interest while it retains control over its subsidiary be accounted for consistently; that when a subsidiary is
deconsolidated, any retained noncontrolling equity investment be initially measured at fair value; and that sufficient
disclosure is made to clearly identify and distinguish between the interests of the parent and the noncontrolling
owners. SFAS 160 applies to all entities that prepare consolidated financial statements, except for non-profit
entities. SFAS 160 is effective for fiscal years beginning after December 31, 2008. Early adoption is not
permitted. The Company will adopt SFAS 160 on January 1, 2009, and the impact is not expected to be material to
the Company’s financial position or results of operations.
SFAS 161
In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities
– an Amendment of FASB Statement No. 133” (SFAS 161). SFAS 161 enhances the current disclosures under
SFAS 133 and requires that objectives for using derivative instruments be disclosed in terms of underlying risk and
accounting designation in order to better convey the purpose of derivative use in terms of the risks that the entity is
intending to manage. Entities are required to provide enhanced disclosures about (a) how and why an entity uses
derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement
133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s
financial position, financial performance, and cash flows. Tabular disclosure of fair value amounts and gains and
losses on derivative instruments and related hedged items is required. SFAS 161 is effective for financial
statements issued for fiscal years and interim periods beginning after November 15, 2008, with early adoption
encouraged. The Company will adopt SFAS 161 on January 1, 2009, and the impact is not expected to be material
to the Company’s financial position or results of operations.
SFAS 162
In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles”
(SFAS No. 162). SFAS No. 162 identifies the sources of accounting principles and the framework for selecting
principles used in the preparation of financial statements. SFAS No. 162 is effective 60 days following the SEC’s
approval of the Public Company Accounting Oversight Board amendments to AU Section 411, “The Meaning of
Present Fairly in Conformity with Generally Accepted Accounting Principles”. The implementation of this standard
will not have a material impact on its financial position and results of operations.
FSP EITF 03-6-1
In June 2008, the FASB issued FSP EITF 03-6-1, “Determining Whether Instruments Granted in Share-Based
Payment Transactions Are Participating Securities” (FSP EITF 03-6-1). FSP EITF 03-6-1 clarified that all
outstanding unvested share-based payment awards that contain rights to nonforfeitable dividends participate in
undistributed earnings with common shareholders. Awards of this nature are considered participating securities and
the two-class method of computing basic and diluted earnings per share must be applied. FSP EITF 03-6-1 is
effective for fiscal years beginning after December 15, 2008. The Company will adopt FSP EITF 03-6-1on January
1, 2009, and the impact is not expected to be material to the Company’s financial position or results of operations.