Canon 2009 Annual Report Download - page 73

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(w) Recently Issued Accounting Guidance
In June 2009, the Financial Accounting Standards Board
(“FASB”) issued the Accounting Standards Codifi cation (“ASC”).
The ASC has become the source of authoritative U.S. GAAP.
Additionally, rules and interpretive releases of the U.S. Securities
and Exchange Commission (“SEC”) under authority of the fed-
eral securities laws are also sources of authoritative U.S. GAAP
for SEC registrants. The ASC did not change current U.S GAAP,
but was intended to simplify user access to all authoritative U.S.
GAAP by providing all the authoritative literature related to a
particular topic in one place. This Codifi cation is effective for fi s-
cal years and interim periods ending after September 15, 2009
and was adopted by Canon beginning from the quarter ended
September 30, 2009. This adoption did not have a material
impact on Canon’s consolidated results of operations and fi nan-
cial condition. However, throughout the notes to the consolidat-
ed fi nancial statements, references that were previously made to
various former authoritative U.S. GAAP pronouncements have
been removed.
In December 2007, the FASB issued new accounting guid-
ance for business combinations. This guidance establishes princi-
ples and requirements for how an acquirer recognizes and
measures in its fi nancial statements the identifi able assets
acquired, the liabilities assumed, any noncontrolling interest in
the acquiree and the goodwill acquired in a business combina-
tion. This guidance also establishes disclosure requirements to
enable the evaluation of the nature and fi nancial effects of the
business combination. This guidance is effective for fi scal years
beginning on or after December 15, 2008 and was adopted by
Canon for any business combinations with an acquisition date on
or after January 1, 2009. This adoption did not have a material
impact on Canon’s consolidated results of operations and fi nan-
cial condition.
In December 2007, the FASB issued new accounting guid-
ance for noncontrolling interests in consolidated fi nancial state-
ments. This guidance establishes accounting and reporting
guidance for ownership interests in subsidiaries held by parties
other than the parent, the amount of consolidated net income
attributable to the parent and to the noncontrolling interest,
changes in a parent’s ownership interest, and the valuation of
retained noncontrolling equity investments when a subsidiary is
deconsolidated. This guidance also establishes disclosure
requirements that clearly identify and distinguish between the
interests of the parent and the interests of the noncontrolling
owners. This guidance is effective for fi scal years beginning on
or after December 15, 2008 on a prospective basis, except for
certain presentation and disclosure requirements, which must be
applied retrospectively for all periods presented, and was adopt-
ed by Canon in the fi rst quarter beginning January 1, 2009.
Upon the adoption of this guidance, noncontrolling interests,
which were previously referred to as minority interests and clas-
sifi ed between total liabilities and stockholders’ equity on the
consolidated balance sheets, are now included as a separate
component of total equity. In addition, consolidated net income
on the consolidated statements of income now includes the net
income (loss) attributable to noncontrolling interests. These
fi nancial statement presentation requirements have been adopt-
ed retrospectively and prior year amounts in the consolidated
fi nancial statements have been reclassifi ed or adjusted to con-
form to this guidance. This adoption did not have a material
impact on Canon’s consolidated results of operations and fi nan-
cial condition.
In October 2009, the FASB issued new accounting guidance
for revenue recognition under multiple-deliverable arrange-
ments. This guidance modifi es the criteria for separating consid-
eration under multiple-deliverable arrangements and requires
allocation of the overall consideration to each deliverable using
the estimated selling price in the absence of vendor-specifi c
objective evidence or third-party evidence of selling price for
deliverables. As a result, the residual method of allocating
arrangement consideration will no longer be permitted. The
guidance also requires additional disclosures about how a ven-
dor allocates revenue in its arrangements and about the signifi -
cant judgments made and their impact on revenue recognition.
This guidance is effective for fi scal years beginning on or after
June 15, 2010 and is required to be adopted by Canon no later
than the fi rst quarter beginning January 1, 2011 (with early
adoption permitted). The provisions are effective prospectively
for revenue arrangements entered into or materially modifi ed
after the effective date, or retrospectively for all prior periods.
Canon is currently evaluating the effect that the adoption of this
guidance will have on its consolidated results of operations and
fi nancial condition.
In October 2009, the FASB issued new accounting guidance
for software revenue recognition. This guidance modifi es the
scope of the software revenue recognition guidance to exclude
from its requirements non-software components of tangible
products and software components of tangible products that
are sold, licensed, or leased with tangible products when the
software components and non-software components of the tan-
gible product function together to deliver the tangible product’s
essential functionality. This guidance is effective for fi scal years
beginning on or after June 15, 2010 and is required to be
adopted by Canon no later than the fi rst quarter beginning
January 1, 2011 (with early adoption permitted) using the same
effective date and the same transition method used to adopt
the guidance for revenue recognition under multiple-deliverable
arrangements. Canon is currently evaluating the effect that the
adoption of this guidance will have on its consolidated results of
operations and fi nancial condition.
(x) Reclassifi cations
Certain reclassifi cations have been made to the prior years’ con-
solidated statements of cash fl ows to conform to the current
year presentation.
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