Virgin Media 2009 Annual Report Download - page 163

VIRGIN MEDIA INC.
NOTES TO CONDENSED FINANCIAL INFORMATION OF REGISTRANT
Note 1—Basis of Presentation
In our condensed financial statements, our investment in subsidiaries is stated at cost plus equity in
the undistributed earnings of the subsidiaries. Our share of net loss of our subsidiaries is included in
net loss using the equity method of accounting. The condensed financial statements should be read in
conjunction with our consolidated financial statements.
In May 2008, the FASB issued new guidance which requires that the liability and equity
components of convertible debt instruments that may be settled in cash upon conversion (including
partial cash settlement) be separately accounted for in a manner that reflects an issuer’s nonconvertible
debt borrowing rate. As a result, the liability component is recorded at a discount reflecting its below
market coupon interest rate, and is subsequently accreted to its par value over its expected life, with
the rate of interest that reflects the market rate at issuance being reflected in the results of operations.
We adopted the guidance on January 1, 2009 as our convertible senior notes are within the scope of
the guidance and we have applied it on a retrospective basis, whereby our prior period results have
been adjusted.
Note 2—Other
No cash dividend was paid to the registrant by subsidiaries for the years ended December 31, 2009,
December 31, 2008 and December 31, 2007.
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