First Data 2009 Annual Report Download - page 236

Chase Paymentech
NOTES TO COMBINED FINANCIAL STATEMENTS
For the years ended December 31, 2007 and 2006 and
the year ended December 31, 2005 (unaudited) (Continued)
NOTE 3—NEW ACCOUNTING PRONOUNCEMENTS
Accounting for Uncertainty in Income Taxes
In June 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. (FIN) 48,
Accounting for Uncertainty in Income Taxes,An Interpretation of FASB Statement No. 109 (FIN 48). FIN 48
provides a comprehensive model for how a company should recognize, measure, present and disclose in its
financial statements uncertain tax positions that the company has taken or expects to take on a tax return. FIN 48
defines the threshold for recognizing tax return positions in the financial statements as “more likely than not” that
the position is sustainable, based on its merits. FIN 48 also provides guidance on the measurement, classification
and disclosure of tax return positions in the financial statements. FIN 48 is effective for nonpublic enterprises for
fiscal years beginning after December 15, 2007, with the cumulative effect of the change in accounting principle
recorded as an adjustment to the beginning balance of retained earnings in the period of adoption. The Company
plans to adopt this interpretation in 2008 and is currently evaluating the impact of implementing FIN 48 on its
combined financial statements.
Fair Value Measurements
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. This statement defines fair
value, establishes a fair value hierarchy to be used in U.S. GAAP, and expands disclosures about fair value
measurements. Although this statement does not require any new fair value measurements, the application could
change current practice. The statement is effective for recurring fair value measurements of assets and liabilities
for fiscal years beginning after November 15, 2007, and for nonrecurring measurements of nonfinancial assets
and liabilities for fiscal years beginning after November 15, 2008. The Company is currently evaluating the
impact of implementing this statement on its combined financial statements.
The Fair Value Option
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and
Financial Liabilities—Including an Amendment of FASB Statement No. 115 (SFAS 159). SFAS 159 gives entities
the ability to elect to measure many financial instruments and certain other items at fair value. The fair value
election is made on an instrument by instrument basis and is irrevocable. Unrealized gains and losses on items
elected for fair value accounting are reported in earnings at each subsequent reporting date. SFAS 159 is
effective for fiscal years beginning after November 15, 2007. At this time, the Company does not anticipate
electing the fair value option.
Business Combinations
In December 2007, the FASB issued SFAS No. 141(R), Business Combinations (SFAS 141R). Under
Statement 141R, an acquiring entity will be required to recognize all the assets acquired, liabilities assumed, and
noncontrolling interests at the acquisition-date fair value. These acquisition-date fair value provisions apply to
contingent consideration, in-process research and development and acquisition contingencies. The new standard
also requires expensing associated acquisition costs and restructuring charges. SFAS 141R is effective as of the
beginning of the first annual reporting period beginning on or after December 15, 2008. The Company plans to
adopt the provisions of this statement prospectively for business combinations with closing dates after January 1,
2009.
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