Western Union 2009 Annual Report Download - page 122

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13. Stockholders’ Equity
Accumulated other comprehensive loss
Accumulated other comprehensive loss includes all changes in equity during a period that have yet to be
recognized in income, except those resulting from transactions with shareholders. The major components
include foreign currency translation adjustments, pension liability adjustments, unrealized gains and losses on
investment securities and gains or losses from cash flow hedging activities.
Unrealized gains and losses on investment securities that are available for sale, primarily municipal
securities, are included in accumulated other comprehensive loss until the investment is either sold or deemed
other-than-temporarily impaired. See Note 7 for further discussion.
The effective portion of the change in fair value of derivatives that qualify as cash flow hedges are
recorded in accumulated other comprehensive loss. Generally, amounts are recognized in income when the
related forecasted transaction affects earnings. See Note 14 for further discussion.
The assets and liabilities of foreign subsidiaries whose functional currency is not the United States dollar
are translated using the appropriate exchange rate as of the end of the year. Foreign currency translation
adjustments represent unrealized gains and losses on assets and liabilities arising from the difference in the
foreign country currency compared to the United States dollar. These gains and losses are accumulated in
comprehensive income. When a foreign subsidiary is substantially liquidated, the cumulative translation gain
or loss is removed from “Accumulated other comprehensive loss” and is recognized as a component of the
gain or loss on the sale of the subsidiary.
A pension liability adjustment associated with our defined benefit pension plans is recognized for the
difference between estimated assumptions (e.g., asset returns, discount rates, mortality) and actual results. The
amount in “Accumulated other comprehensive loss” is amortized to income over the remaining life expectancy
of the plan participants. Details of the pension plans’ assets and obligations are explained further in Note 11.
108
THE WESTERN UNION COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)