Archer Daniels Midland 2009 Annual Report Download - page 50

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44
Archer Daniels Midland Company
Notes to Consolidated Financial Statements (Continued)
Note 1.
Summary of Significant Accounting Policies (Continued)
During April 2009, the FASB issued three FSPs that are intended to provide additional application guidance and
enhance disclosures about fair value measurements and impairments of securities. FSP FAS 157-4, Determining
Whether a Market Is Not Active and a Transaction Is Not Distressed (FSP FAS 157-4), clarifies the objective and
method of fair value measurement even when there has been a significant decrease in market activity for the asset
being measured. FSP FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary
Impairments (FSP FAS 115-2 and FAS 124-2), establishes a new model for measuring other-than-temporary
impairments for debt securities, including establishing criteria for when to recognize a write-down on debt
securities through earnings versus other comprehensive income. FSP FAS 107-1 and APB 28-1, Interim
Disclosures about Fair Value of Financial Instruments (FSP FAS 107-1 and APB 28-1), expands the fair value
disclosures required for all financial instruments within the scope of SFAS No. 107, Disclosures about Fair Value
of Financial Instruments, to interim periods in addition to annual periods. The proposal also amends APB Opinion
No. 28, Interim Financial Reporting, to require those disclosures in all interim financial statements. FSP FAS 107-
1 and APB 28-1 requires the Company to expand disclosure in the notes to the Company’s interim consolidated
financial statements but will not impact financial results. The Company adopted these FSPs as of June 30, 2009.
During May 2009, the FASB issued SFAS No. 165, Subsequent Events (SFAS 165). SFAS 165 establishes
evaluation principles and disclosure requirements for subsequent events. Upon implementation of SFAS 165, an
entity is required to disclose the date through which subsequent events have been evaluated, as well as whether that
date is the date the financial statements were issued or the date the financial statements were available to be issued.
The Company has evaluated events occurring between the end of its most recent fiscal year and the date the
financial statements were issued.
During June 2008, the FASB issued SFAS No. 167, Amendments to FASB Interpretation No. FIN 46(R) (SFAS
167). SFAS 167 changes how a reporting entity determines when an entity that is insufficiently capitalized or is not
controlled through voting (or similar rights) should be consolidated. The determination of whether a reporting
entity is required to consolidate another entity is based on, among other things, the other entity’s purpose and
design and the reporting entity’s ability to direct the activities of the other entity that most significantly impact the
other entity’s economic performance. SFAS 167 will require a number of new disclosures including disclosures
about the reporting entity’s involvement with variable interest entities and any significant changes in risk exposure
due to that involvement. A reporting entity will be required to disclose how its involvement with a variable interest
entity affects the reporting entity’s financial statements. The Company will be required to adopt SFAS 167 on July
1, 2010, and has not yet assessed the impact of the adoption of this standard on the Company’s financial statements.
Note 2.
Acquisitions
The Company’s 2009, 2008, and 2007 acquisitions were accounted for as purchases in accordance with SFAS No.
141, Business Combinations. Accordingly, the tangible assets and liabilities have been adjusted to fair values with
the remainder of the purchase price, if any, recorded as goodwill. The identifiable intangible assets acquired as part
of these acquisitions are not material.