Xcel Energy 2008 Annual Report Download - page 105

Download and view the complete annual report

Please find page 105 of the 2008 Xcel Energy annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 172

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172

items for which the fair value option has been elected in earnings at each subsequent reporting date. This statement
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 was effective for fiscal years
beginning after Nov. 15, 2007. Xcel Energy adopted SFAS No. 159 on Jan. 1, 2008, and the adoption did not have a
material impact on its consolidated financial statements.
Determining the Fair Value of a Financial Asset When the Market for That Asset is Not Active (FSP FAS 157-3) — In
October 2008, the FASB issued FSP FAS 157-3, which clarifies the application of SFAS No. 157 in a market that is
not active. FSP FAS 157-3 was effective immediately upon issuance, and applied to prior periods for which financial
statements had not yet been issued. Xcel Energy adopted FSP FAS 157-3 as of Sept. 30, 2008 and the adoption did
not have a material impact on its consolidated financial statements.
Accounting for Deferred Compensation and Postretirement Benefit Aspects of Endorsement Split-Dollar Life Insurance
Arrangements (Emerging Issues Task Force (EITF) Issue No. 06-4) — In June 2006, the EITF reached a consensus on
EITF No. 06-4, which provides guidance on the recognition of a liability and related compensation costs for
endorsement split-dollar life insurance policies that provide a benefit to an employee that extends to postretirement
periods. Therefore, this EITF would not apply to a split-dollar life insurance arrangement that provides a specified
benefit to an employee that is limited to the employee’s active service period with an employer. EITF No. 06-4 was
effective for fiscal years beginning after Dec. 15, 2007, with earlier application permitted. Upon adoption of EITF
No. 06-4 on Jan. 1, 2008, Xcel Energy recorded a liability of $1.6 million, net of tax, as a reduction of retained
earnings. Thereafter, changes in the liability are reflected in operating results.
Amendment of FASB Interpretation No. 39 (FSP FIN 39-1) — In April 2007, the FASB issued FSP FIN 39-1, which
amends FIN 39, Offsetting of Amounts Related to Certain Contracts, to permit companies to offset fair value amounts
recognized for the right to reclaim cash collateral (a receivable) or the obligation to return cash collateral (a payable)
against fair value amounts recognized for derivative instruments executed with the same counterparty under a master
netting arrangement. FSP FIN 39-1 was effective for fiscal years beginning after Nov. 15, 2007. Xcel Energy adopted
FSP FIN 39-1 on Jan. 1, 2008, and the adoption did not have a material impact on its consolidated financial
statements.
Accounting for Income Tax Benefits of Dividends on Share-Based Payment Awards (EITF No. 06-11) — In June 2007,
the EITF reached a consensus on EITF No. 06-11, which states that an entity should recognize a realized tax benefit
associated with dividends on nonvested equity shares and nonvested equity share units charged to retained earnings as
an increase in additional paid in capital. The amount recognized in additional paid in capital should be included in the
pool of excess tax benefits available to absorb potential future tax deficiencies on share-based payment awards. EITF
No. 06-11 was to be applied prospectively to income tax benefits of dividends on equity-classified share-based payment
awards that were declared in fiscal years beginning after Dec. 15, 2007. Xcel Energy adopted EITF No. 06-11 on
Jan. 1, 2008, and the adoption did not have a material impact on its consolidated financial statements.
The Hierarchy of GAAP (SFAS No. 162) — In May 2008, the FASB issued SFAS No. 162, which establishes the
GAAP hierarchy, identifying the sources of accounting principles and the framework for selecting the principles to be
used in the preparation of financial statements. SFAS No. 162 was effective Nov. 15, 2008. Xcel Energy adopted SFAS
No. 162 on Dec. 31, 2008, and the adoption did not have a material impact on its consolidated financial statements.
Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities
(FSP FAS 140-4 and FIN 46(R)-8) — In December 2008, the FASB issued FSP FAS 140-4 and FIN 46(R)-8, which
amends SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, to
require public entities to provide additional disclosures about transfers of financial assets. It also amends FIN 46
(revised December 2003), Consolidation of Variable Interest Entities, to require public enterprises, including sponsors that
have a variable interest in a variable interest entity, to provide additional disclosures about their involvement with
variable interest entities. FSP FAS 140-4 and FIN 46(R)-8 was effective for the interim and annual periods ending after
Dec. 15, 2008. Xcel Energy adopted FSP FAS 140-4 and FIN 46(R)-8 on Dec. 31, 2008, and the adoption did not
have a material impact on its consolidated financial statements.
95