ADP 2011 Annual Report Download - page 33

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
On July 1, 2010, we adopted the Financial Accounting Standards Board (“FASB”
) Accounting Standards Update (“ASU” ) 2009 - 13,
“Multiple Deliverable Revenue Arrangements,” and ASU 2009 - 14, “Certain Revenue Arrangements that Include Software Elements.”
ASU 2009 - 13 modifies the guidance related to accounting for arrangements with multiple deliverables by providing an alternative
when vendor specific objective evidence (“
VSOE ” ) or third - party evidence (“ TPE ” ) does not exist to determine the selling price of a
deliverable. The alternative when VSOE or TPE does not exist is management
’ s best estimate of the selling price of the deliverable.
Consideration for multiple deliverables is then allocated based upon the relative selling price of the deliverables and revenue is
recognized as earned for each deliverable. ASU 2009 - 14 modifies the scope of the software revenue recognition guidance to exclude
(a) non
- software components of tangible products and (b) software components of tangible products that are sold, licensed, or
leased with tangible products when the software components and non
- software components of the tangible product function
together to deliver the tangible product
’ s functionality. The adoption of ASU 2009 - 13 and ASU 2009 - 14 did not have a material
impact on our consolidated results of operations, financial condition or cash flows.
In December 2010, we adopted ASU 2010
- 20, “Disclosures about the Credit Quality of Financing Receivables and the Allowance for
Credit Losses.”
ASU 2010 - 20 requires greater transparency about an entity ’ s allowance for credit losses and the credit quality of its
financing receivables. The guidance is intended to provide disclosures to help facilitate the evaluation of the entity
’ s credit risk, how
that risk is analyzed and the reasons for changes in the allowance for credit losses. The adoption of ASU 2010
- 20 did not have an
impact on our consolidated results of operations, financial condition or cash flows.
In April 2011, we adopted ASU 2010
- 29, “Disclosure of Supplementary Pro Forma Information for Business Combinations.” ASU
2010 - 29 requires an entity to disclose revenue and earnings of the combined entity as though the business combination(s) that
occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period. ASU 2010
- 29 is
effective prospectively for business combinations that occur on or after the beginning of the first annual reporting period beginning
after December 15, 2010. The adoption of ASU 2010
- 29 did not have an impact on our consolidated results of operations, financial
condition or cash flows.
In April 2011, the FASB issued ASU 2011
- 03, “Transfers and Servicing (Topic 860): Reconsideration of Effective Control for
Repurchase Agreements.”
ASU 2011 - 03 revises the criteria for assessing effective control for repurchase agreements and other
agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity. The
determination of whether the transfer of a financial asset subject to a repurchase agreement is a sale is based, in part, on whether the
entity maintains effective control over the financial asset. ASU 2011
- 03 removes from the assessment of effective control: the
criterion requiring the transferor to have the ability to repurchase or redeem the financial asset on substantially the agreed terms,
even in the event of default by the transferee, and the related requirement to demonstrate that the transferor possesses adequate
collateral to fund substantially all the cost of purchasing replacement financial assets. ASU 2011
- 03 is effective for the first interim or
annual period beginning on or after December 15, 2011. We are currently evaluating the impact, if any, that the adoption of ASU
2011 - 03 will have on our consolidated results of operations, financial condition or cash flows.
In May 2011, the FASB issued ASU 2011
- 04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value
Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” The issuance of ASU 2011
- 04 results in global fair value
measurement and disclosure guidance and minimizes differences between U.S. GAAP and IFRS. ASU 2011
- 04 requires an expansion
of the information required for “
level 3 ” measurements and provides the updates to the existing measurement guidance. ASU 2011 - 04
is effective for fiscal years and interim periods beginning after December 15, 2011. We do not expect the adoption of ASU 2011 - 04 to
have a material impact on our consolidated results of operations, financial condition, or cash flows.
In June, 2011, the FASB issued ASU 2011
- 05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income.” ASU
2011 - 05 requires entities to present net income and other comprehensive income in either a single continuous statement or in two
separate, but consecutive, statements of net income and other comprehensive income. ASU 2011
- 05 is effective for fiscal years and
interim periods beginning after December 15, 2011. The adoption of ASU 2011
- 05 will not have a material impact on our consolidated
results of operations, financial condition, or cash flows.
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