Chevron 2008 Annual Report Download - page 56

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Management’s Discussion and Analysis of
Financial Condition and Results of Operations
equity section of the Consolidated Balance Sheet but sepa-
rate from the parent’s equity. It also requires the amount
of consolidated net income attributable to the parent and
the noncontrolling interest to be clearly identified and pre-
sented on the face of the Consolidated Statement of Income.
Certain changes in a parent’s ownership interest are to be
accounted for as equity transactions and when a subsidiary
is deconsolidated, any noncontrolling equity investment in
the former subsidiary is to be initially measured at fair value.
Implementation of FAS 160 will not significantly change the
presentation of the company’s Consolidated Statement of
Income or Consolidated Balance Sheet.
FASB Statement No. 161, Disclosures about Derivative
Instruments and Hedging Activities (FAS 161) In March
2008, the FASB issued FAS 161, which became effective for
the company on January 1, 2009. This standard amends
and expands the disclosure requirements of FASB Statement
No. 133, Accounting for Derivative Instruments and Hedging
Activities. FAS 161 requires disclosures related to objectives
and strategies for using derivatives; the fair-value amounts of,
and gains and losses on, derivative instruments; and credit-
risk-related contingent features in derivative agreements.
The company’s disclosures for derivative instruments will
be expanded to include a tabular representation of the loca-
tion and fair value amounts of derivative instruments on the
balance sheet, fair value gains and losses on the income state-
ment and gains and losses associated with cash flow hedges
recognized in earnings and other comprehensive income.
FASB Staff Position FAS 132(R)-1, Employer’s Disclosures
about Postretirement Benefit Plan Assets (FSP FAS 132(R)-1)
In December 2008, the FASB issued FSP FAS 132(R)-1,
which becomes effective with the company’s reporting at
December 31, 2009. This standard amends and expands the
disclosure requirements on the plan assets of defined benefit
pension and other postretirement plans to provide users of
financial statements with an understanding of: how invest-
ment allocation decisions are made; the major categories
of plan assets; the inputs and valuation techniques used to
measure the fair value of plan assets; the effect of fair-value
measurements using significant unobservable inputs on
changes in plan assets for the period; and significant con-
centrations of risk within plan assets. The company does not
prefund its other postretirement plan obligations, and the
effect on the company’s disclosures for its pension plan assets
as a result of the adoption of FSP FAS 132(R)-1 will depend
on the company’s plan assets at that time.
54 Chevron Corporation 2008 Annual Report