Ford 2009 Annual Report Download - page 92

Notes to the Financial Statements
90 Ford Motor Company | 2009 Annual Report
NOTE 2. SUMMARY OF ACCOUNTING POLICIES (Continued)
Presentation of Sales and Sales-Related Taxes
We collect and remit taxes assessed by different governmental authorities that are both imposed on and concurrent
with a revenue-producing transaction between us and our customers. These taxes may include, but are not limited to,
sales, use, value-added, and some excise taxes. We report the collection of these taxes on a net basis (excluded from
revenues).
NOTE 3. RECENTLY ISSUED ACCOUNTING STANDARDS
In June 2009, the FASB issued Statement of Financial Accounting Standards No. 168, The FASB Accounting
Standards Codification™ and the Hierarchy of Generally Accepted Accounting Principles - a replacement of FASB
Statement No. 162. This standard establishes the FASB Accounting Standards Codification ("Codification") as the single
source of authoritative U.S. GAAP, superseding all previously issued authoritative guidance. All references to pre-
Codification GAAP in our financial statements are replaced with descriptive titles.
In June 2009, the FASB issued a new accounting standard related to transfers of financial assets. The standard
provides greater transparency about transfers of financial assets and a company’s continuing involvement in the
transferred financial assets. The standard also removes the concept of a qualifying special-purpose entity from
U.S. GAAP, changes the requirements for derecognizing financial assets, and requires additional disclosures about a
transferor's continuing involvement with the transferred financial assets and the related risks retained. The standard is
effective for us as of January 1, 2010. We do not expect this standard to have a material impact on our financial
condition, results of operations, and financial statement disclosures.
In June 2009, the FASB issued a new accounting standard related to the consolidation of VIEs. The standard
replaces the quantitative-based risks and rewards calculation with an approach that is primarily qualitative. The standard
also requires ongoing reassessments of the appropriateness of consolidation, and additional disclosures about
involvement with VIEs. The standard is effective for us as of January 1, 2010. We expect that adoption of this standard
will result in the deconsolidation of many of our joint ventures, including Ford Otomotiv Sanayi Anonim Sirketi ("Ford
Otosan") reported within our Ford Europe segment results. Although we continue to examine the potential impact of this
standard on our financial condition, results of operations, and financial statement disclosures, we anticipate that its
adoption will impact Income/(Loss) before income taxes and in particular Ford Europe's pre-tax results (see Note 13 for
additional information regarding the financial results of our consolidated VIEs). The standard will have no effect on
Net
income/(loss) attributable to Ford Motor Company.
In October 2009, the FASB issued amended guidance addressing revenue arrangements with multiple deliverables.
The new guidance establishes a selling price hierarchy for determining the selling price of a deliverable, eliminates the
residual method of allocation, requires the allocation of arrangement consideration to all deliverables using the relative
selling price method, and significantly expands disclosure requirements. The guidance is effective prospectively for
revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. We are
addressing the potential impact of this guidance on our financial condition, results of operations, and financial statement
disclosures.
In October 2009, the FASB issued amended guidance addressing revenue arrangements that include both tangible
products and software elements. The new guidance amends the scope of the software guidance to exclude tangible
products containing both software and nonsoftware components that function together to deliver the tangible product's
essential functionality. The guidance also requires entities affected by its amendments to provide the expanded
disclosures included within the amended guidance on revenue arrangements with multiple deliverables. The guidance is
effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after
June 15, 2010. We are addressing the potential impact of this guidance on our financial condition, results of operations,
and financial statement disclosures.