Amgen 2009 Annual Report Download - page 131

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AMGEN INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Recent accounting pronouncements
In June 2009, the FASB issued a new accounting standard which amends guidance regarding consolidation
of variable interest entities to address the elimination of the concept of a qualifying special purpose entity. This
standard also replaces the quantitative-based risks and rewards calculation for determining which enterprise has a
controlling financial interest in a variable interest entity with an approach focused on identifying which enter-
prise has the power to direct the activities of the variable interest entity and the obligation to absorb losses of the
entity or the right to receive benefits from the entity. Additionally, this standard requires any enterprise that holds
a variable interest in a variable interest entity to make ongoing assessments of whether it has a controlling finan-
cial interest in the variable interest entity and to provide enhanced disclosures that will provide users of financial
statements with more transparent information about an enterprise’s involvement in the variable interest entity.
This standard is effective for us beginning January 1, 2010. The adoption of this standard is not expected to have
a material impact on our consolidated results of operations, financial position or cash flows.
In October 2009, the FASB issued a new accounting standard which amends guidance on accounting for rev-
enue arrangements involving the delivery of more than one element of goods and/or services. This standard
addresses the unit of accounting for arrangements involving multiple deliverables and removes the previous
separation criteria that objective and reliable evidence of fair value of any undelivered item must exist for the de-
livered item to be considered a separate unit of accounting. This standard also addresses how the arrangement
consideration should be allocated to each deliverable. Finally, this standard expands disclosures related to multi-
ple element revenue arrangements. This standard is effective for us beginning January 1, 2011. The adoption of
this standard is not expected to have a material impact on our consolidated results of operations, financial posi-
tion or cash flows.
2. Change in method of accounting for convertible debt instruments
As discussed in Note 1, “Summary of significant accounting policies—Change in method of accounting for
convertible debt instruments,” effective January 1, 2009, we adopted a new accounting standard which changed
the method of accounting for certain types of convertible debt, including our 2011 Convertible Notes, 2013 Con-
vertible Notes and our 2032 Modified Convertible Notes, and, as required by this standard, we retrospectively
applied this change in accounting to all prior periods for which we had applicable outstanding convertible debt.
F-11