ADP 2008 Annual Report Download - page 67

NOTE 16. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Comprehensive income is a measure of income that includes both net earnings and other comprehensive income (loss). Other comprehensive
income (loss) results from items deferred on the Consolidated Balance Sheets in stockholders’ equity. Other comprehensive income (loss) was
$309.6 million, $156.0 million, and $(140.4) million in fiscal 2008, 2007 and 2006, respectively. The accumulated balances for each
component of other comprehensive income (loss) are as follows:
NOTE 17. STAFF ACCOUNTING BULLETIN NO. 108
In fiscal 2007, the Staff of the SEC issued Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when
Quantifying Misstatements in Current Year Financial Statements” (“SAB 108”). SAB 108 requires registrants to use a combination of two
approaches to evaluate the materiality of identified unadjusted errors: the “rollover” approach, which quantifies an error based on the amount o
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the error originating in the current year income statement, and the “iron curtain” approach, which quantifies an error based on the effects of
correcting the misstatement existing in the balance sheet at the end of the current year. SAB 108 permits companies to adjust for the cumulative
effect of immaterial errors relating to prior years in the carrying amount of assets and liabilities as of the beginning of the current fiscal year,
with an offsetting adjustment to the opening balance of retained earnings in the year of adoption. In fiscal 2007, the Company adopted SAB
108.
In the course of evaluating the provisions of SAB 108, the Company identified the following misstatements as of July 1, 2006. The adoption of
SAB 108 resulted in an increase to opening retained earnings as of July 1, 2006 of approximately $44.3 million, net of tax. Such errors, which
management previously deemed immaterial, were related to the following:
zOverstated accrued expenses of $22.1 million, net of tax, related to professional services, termination of contracts and employee
benefits, which arose prior to the fiscal year ended June 30, 2003
zOverstated accounts receivable reserves of $11.2 million, net of tax, which arose prior to the fiscal year ended June 30, 2001
zOverstated accrued expenses related to certain post retirement and non-US pension plans by $8.2 million, net of tax, of which $3.3
million arose in the fiscal year ended June 30, 2002 and the remaining arose ratably over the fiscal years ended June 30, 2003, 2004,
2005 and 2006
zOverstated insurance and environmental reserves related primarily to worker’ s compensation liabilities and self-insured liabilities of
$9.3 million, net of tax, which arose prior to the fiscal year ended June 30, 2001
zUnderstated tax provision and liability, as well as related interest and penalties, of $6.5 million, related to tax deductions taken for the
tax years 1998 through 2006
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June 30, 2008 2007 2006
Currency translation adjustments $284.6 $156.7 $80.3
Unrealized gain (loss) on available-for-sale
securities, net of tax
91.3 (118.4) (200.3)
Minimum pension liability adjustment
(prior to SFAS No. 158), net of tax (8.6)(8.6) (6.3)
Adoption of SFAS No. 158, net of tax
(63.1) (63.1) -
Pension liability adjustment (post adoption of
SFAS No. 158), net of tax (28.0) - -
Accumulated other comprehensive income (loss) $276.2 $(33.4) $(126.3)