Goldman Sachs 2009 Annual Report Download - page 102

Goldman Sachs 2009 Annual Report
100
Notes to Consolidated Financial Statements
Determining Whether Instruments Granted in Share-Based
Payment Transactions Are Participating Securities (ASC 260).
In June 2008, the FASB issued amended accounting principles
related to determining whether instruments granted in share-
based payment transactions are participating securities.
These amended principles require companies to treat unvested
share-based payment awards that have non-forfeitable rights
to dividends or dividend equivalents as a separate class of
securities in calculating earnings per common share under the
two-class method. The  rm adopted these amended accounting
principles in the  rst quarter of  scal 2009. The impact to basic
earnings per common share for the year ended December2009
was a reduction of $0.06 per common share. There was no
impact on diluted earnings per common share for the year
ended December2009. Prior periods have not been restated
due to immateriality.
Business Combinations (ASC 805). In December 2007, the
FASB issued amended accounting principles related to business
combinations, which changed the accounting for transaction
costs, certain contingent assets and liabilities, and other
balances in a business combination. In addition, in partial
acquisitions, when control is obtained, the amended principles
require that the acquiring company measure and record all
of the target’s assets and liabilities, including goodwill, at
fair value as if the entire target company had been acquired.
These amended accounting principles applied to the  rm’s
business combinations beginning in the  rst quarter of  scal
2009. Adoption did not affect the  rm’s  nancial condition,
results of operations or cash  ows, but may have an effect on
accounting for future business combinations.
Noncontrolling Interests in Consolidated Financial Statements
(ASC 810). In December 2007, the FASB issued amended
accounting principles related to noncontrolling interests
in consolidated  nancial statements, which require that
ownership interests in consolidated subsidiaries held by
parties other than the parent (i.e.,noncontrolling interests) be
accounted for and presented as equity, rather than as a liability
or mezzanine equity. These amended accounting principles
were effective for the  rm beginning in the  rst quarter of
 scal 2009. Adoption did not have a material effect on the
 rm’s  nancial condition, results of operations or cash  ows.
Disclosures by Public Entities (Enterprises) about Transfers
of Financial Assets and Interests in Variable Interest Entities
(ASC 860 and 810). In December2008, the FASB issued
amended principles related to disclosures by public entities
(enterprises) about transfers of  nancial assets and interests
in variable interest entities, which were effective for the  rm
beginning in the one month ended December2008. Since
these amended principles require only additional disclosures
concerning transfers of  nancial assets and interests in VIEs,
adoption did not affect the  rm’s  nancial condition, results of
operations or cash  ows.
Determining Whether an Instrument (or Embedded Feature)
Is Indexed to an Entity’s Own Stock (ASC815). In June 2008,
the FASB issued amended accounting principles related to
determining whether an instrument (or embedded feature) is
indexed to an entity’s own stock. These amended accounting
principles provide guidance about whether an instrument
(such as the  rm’s outstanding common stock warrants)
should be classi ed as equity and not subsequently recorded
at fair value. The  rm adopted these amended accounting
principles in the  rst quarter of  scal 2009. Adoption did not
affect the  rm’s  nancial condition, results of operations or
cash ows.
Determining Fair Value When the Volume and Level of Activity
for the Asset or Liability Have Signi cantly Decreased and
Identifying Transactions That Are Not Orderly (ASC820).
In April2009, the FASB issued amended accounting principles
related to determining fair value when the volume and level of
activity for the asset or liability have signi cantly decreased
and identifying transactions that are not orderly. Speci cally,
these amended principles list factors which should be evaluated
to determine whether a transaction is orderly, clarify that
adjustments to transactions or quoted prices may be necessary
when the volume and level of activity for an asset or liability
have decreased signi cantly, and provide guidance for
determining the concurrent weighting of the transaction price
relative to fair value indications from other valuation techniques
when estimating fair value. The  rm adopted these amended
accounting principles in the second quarter of  scal 2009. Since
the  rm’s fair value methodologies were consistent with these
amended accounting principles, adoption did not affect the
 rm’s  nancial condition, results of operations or cash  ows.
Recognition and Presentation of Other-Than-Temporary
Impairments (ASC 320). In April2009, the FASB issued
amended accounting principles related to recognition and
presentation of other-than-temporary impairments. These
amended principles prescribe that only the portion of an
other-than-temporary impairment on a debt security related
to credit loss is recognized in current period earnings, with the