EMC 2011 Annual Report Download - page 60

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Table of Contents
EMC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
Recent Accounting Pronouncements
In May 2011, the Financial Accounting Standards Board ("FASB") issued new guidance to achieve common fair value measurement and disclosure
requirements between GAAP and International Financial Reporting Standards. This new guidance amends current fair value measurement and disclosure
guidance to include increased transparency around valuation inputs and investment categorization. This new guidance is effective for fiscal years and interim
periods beginning after December 15, 2011. We do not believe the adoption of this guidance will have an impact on our consolidated financial position,
results of operations or cash flows.
New Accounting Guidance Recently Adopted
In the beginning of 2010, we early adopted the FASB's amended accounting standards for revenue recognition related to the manner in which we
recognize revenue with respect to multiple-element arrangements associated with tangible products containing software and non-software components that
function together to deliver the product's essential functionality. The new accounting guidance did not have a material impact on our financial position or
results of operations for the year ended December 31, 2010 and did not change the units of accounting for our revenue transactions.
In June 2011, the FASB issued new guidance on the presentation of comprehensive income. While the new guidance changes the presentation of
comprehensive income, there are no changes to the components that are recognized in net income or other comprehensive income under current accounting
guidance. We elected to early adopt this new accounting guidance in 2011 and have modified our presentation of the consolidated statements of
comprehensive income to reflect the new standard.
In September 2011, the FASB issued new guidance intended to simplify goodwill impairment testing. Under this guidance, an entity is allowed to first
assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. An entity is not required to
calculate the fair value of a reporting unit unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is
less than its carrying amount. This new guidance includes a number of factors to consider in conducting the qualitative assessment. We elected to early adopt
this new guidance in 2011 and applied it to our 2011 annual goodwill impairment analysis in the fourth quarter of 2011.
The adoption of the new accounting guidance above did not have a material impact on our consolidated financial position, results of operations or cash
flows.
B. Non-controlling Interest in VMware, Inc.
The non-controlling interests' share of equity in VMware is reflected as Non-controlling interest in VMware, Inc. in the accompanying consolidated
balance sheets and was $968.1 million and $762.7 million as of December 31, 2011 and 2010, respectively. At December 31, 2011, EMC held approximately
97% of the combined voting power of VMware's outstanding common stock and approximately 80% of the economic interest in VMware.
The effects of changes in our ownership interest in VMware on our equity were as follows (table in thousands):
For the Twelve Months Ended
December 31, 2011 December 31, 2010
Net income attributable to EMC Corporation $ 2,461,337 $ 1,899,995
Transfers (to) from the non-controlling interest in VMware, Inc.:
Increase in EMC Corporation's additional paid-in-capital for VMware's equity issuances 117,793 151,274
Decrease in EMC Corporation's additional paid-in-capital for VMware's other equity activity (419,758) (337,451)
Net transfers (to) from non-controlling interest (301,965) (186,177)
Change from net income attributable to EMC Corporation and transfers from the non-controlling interest in VMware,
Inc. $ 2,159,372 $ 1,713,818
C. Acquisitions
2011 Acquisitions
During the year ended December 31, 2011, we acquired all of the capital stock of NetWitness Corporation, a privately-held provider of network
security analysis solutions. This acquisition complements and expands our RSA Information Security segment. Additionally, during the year ended
December 31, 2011, VMware acquired six companies. The aggregate consideration for these
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