Baker Hughes 2009 Annual Report Download - page 105

2009 Form 10-K 31
In October 2009, the FASB issued an update to ASC 605,
Revenue Recognition – Multiple Deliverable Revenue Arrange-
ments. This ASU addresses accounting for multiple-deliverable
arrangements to enable vendors to account for deliverables
separately. The provision establishes a selling price hierarchy
for determining the selling price of a deliverable. This update
requires expanded disclosures for multiple deliverable revenue
arrangements. The ASU will be effective for revenue arrange-
ments entered into or materially modified beginning on or
after June 15, 2010. We have not determined the impact,
if any, on our consolidated financial statements.
In September 2006, FASB issued ASC 820, Fair Value
Measurements and Disclosures, which is intended to increase
consistency and comparability in fair value measurements by
defining fair value, establishing a framework for measuring
fair value and expanding disclosures about fair value measure-
ments. On January 1, 2008, we adopted the provisions of this
ASC related to financial assets and liabilities and to nonfinancial
assets and liabilities measured at fair value on a recurring basis
and on January 1, 2009, we adopted the provisions related to
nonfinancial assets and liabilities that are not required or per-
mitted to be measured at fair value on a recurring basis. There
was no material impact to our consolidated financial state-
ments related to these adoptions. Additionally, in April 2009,
the FASB issued the following three accounting standards
updates: (i) ASC 820, Determining Fair Value When the
Volume and Level of Activity for the Asset or Liability Have
Significantly Decreased and Identifying Transactions That Are
Not Orderly, (ii) ASC 320, Recognition and Presentation of
Other-Than-Temporary Impairments, and (iii) ASC 825, Interim
Disclosures about Fair Value of Financial Instruments, which
collectively provide additional guidance and require additional
disclosure regarding determining and reporting fair values for
certain assets and liabilities. We adopted the three accounting
standards updates in the second quarter of 2009 with no mate-
rial impact to our consolidated financial statements. In Septem-
ber 2009, the FASB issued an update to ASC 820, Fair Value
Measurements and Disclosures – Investments in Certain Entities
That Calculate Net Asset Value per Share (or Its Equivalent). The
ASU provides a practical means for measuring the fair value of
investments in certain entities that calculate net asset value per
share. The ASU is effective for the first reporting period ending
after December 15, 2009. We adopted the provisions and dis-
closure requirements of this ASU in December 2009 with no
material impact to our consolidated financial statements.
In December 2007, the FASB issued an update to ASC 810,
Consolidation, to establish accounting and reporting standards
for the noncontrolling interest in a subsidiary and for the
deconsolidation of a subsidiary in an effort to improve the rel-
evance, comparability and transparency of the financial infor-
mation that a reporting entity provides. On January 1, 2009,
we adopted this statement with no change to our consoli-
dated financial statements as amounts are immaterial.
In December 2007, the FASB issued an update to ASC 805,
Business Combinations, to establish principles and require-
ments for the recognition and measurement of assets, liabili-
ties and goodwill, and requires that most transaction and
restructuring costs related to the acquisition be expensed. We
have applied the provisions of this ASC for business combina-
tions with an acquisition date on or after January 1, 2009.
In March 2008, the FASB issued an update to ASC 815,
Disclosures about Derivative Instruments and Hedging Activities,
to require qualitative disclosures about objectives and strategies
for using derivatives and quantitative data about the fair value
of and gains and losses on derivative contracts. We adopted
the new disclosure requirements in the first quarter of 2009.
In June 2008, the FASB issued an update to ASC 260,
Determining Whether Instruments Granted in Share-Based
Payment Transactions Are Participating Securities, to clarify
that all unvested share-based payments that contain rights
to non-forfeitable dividends are participating securities and
shall be included in the computation of both basic and diluted
earnings per share. On January 1, 2009, we adopted this ASC
and have not applied the provisions to prior year quarters as
the impact is immaterial.
In December 2008, the FASB issued an update to ASC 715,
Employers’ Disclosures about Postretirement Benefit Plan
Assets, to require the disclosures of investment policies and
strategies, major categories of plan assets, fair value measure-
ment of plan assets and significant concentration of credit
risks. We adopted the new disclosure requirements in the
fourth quarter of 2009. See Note 14 of the Notes to Consoli-
dated Financial Statements in Item 8 herein for further infor-
mation on the impact of this standard.
RELATED PARTY TRANSACTIONS
There were no significant related party transactions during
the three years ended December 31, 2009.
FORWARD-LOOKING STATEMENTS
MD&A and certain statements in the Notes to Consoli-
dated Financial Statements include forward-looking statements
within the meaning of Section 27A of the Securities Act and
Section 21E of the Exchange Act (each a “forward-looking
statement”). The words “anticipate”, “believe”, “ensure”,
“expect”, “if”, “intend”, “estimate”, “probable”, “project”,
“forecasts”, “predict”, “outlook”, “aim”, “will”, “could”,
“should”, “would”, “may”, “likely” and similar expressions,
and the negative thereof, are intended to identify forward-
looking statements. Our forward-looking statements are based
on assumptions that we believe to be reasonable but that may
not prove to be accurate. The statements do not include the
potential impact of future transactions, such as an acquisition,
disposition, merger, joint venture or other transaction that
could occur, except to the extent specific disclosure is made
with respect to the potential merger with BJ Services. We
undertake no obligation to publicly update or revise any for-
ward-looking statement. Our expectations regarding our busi-
ness outlook, including changes in revenue, pricing, capital