Harris Teeter 2009 Annual Report Download - page 31

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27
In accordance with generally accepted accounting principles, actual results that differ from management’s
assumptions are accumulated and amortized over future periods and, therefore, generally affect the Company’s
recognized expense and recorded obligation in such future periods. While management believes that its
selections of values for the various assumptions are appropriate, significant differences in actual experience or
significant changes in the assumptions may materially affect pension and other post-retirement obligations and
future expense.
Recent Accounting Standards
The FASB Accounting Standards Codification (“ASC”) became effective for the Company as of its
fiscal year ending September 27, 2009. The ASC is now the authoritative reference for nongovernment U.S.
GAAP, except for Securities and Exchange Commission (“SEC”) rules and interpretive releases, which are
also authoritative GAAP for SEC registrants. The ASC brings together in one place all authoritative GAAP
previously in the superseded GAAP hierarchy that has been issued by standard setters, e.g., FASB Statements,
FASB Interpretations, EITF Abstracts, FASB Staff Positions, and AICPA Statements of Position and Audit and
Accounting Guides. Nonauthoritative GAAP includes items previously in the GAAP hierarchy’s lowest level
(e.g., prevalent industry practice) and other accounting guidance, such as textbooks and articles. Going forward,
accounting pronouncements issued by the FASB will be called Accounting Standards Updates (“ASU”).
In December 2007, the FASB issued an update to its authoritative literature for business combinations. The
guidance is incorporated in ASC Subtopic 805-10 and requires most identifiable assets, liabilities, noncontrolling
interest, and goodwill acquired in a business combination to be recorded at “full fair value.” The updated
standard applies to all business combinations, including combinations among mutual entities and combinations
by contract alone. The updated standards become effective for the Company’s 2010 fiscal year beginning on
September 28, 2009 and will be applied to business combinations occurring after the effective date.
In December 2007, the FASB issued an update to its authoritative literature for reporting noncontrolling
interest in consolidated financial statements. The guidance is incorporated in ASC Subtopic 810-10 and requires
noncontrolling interest (previously referred to as minority interests) to be treated as a separate component
of equity, not as a liability or other item outside of permanent equity. The updated standard applies to the
accounting for noncontrolling interest and transactions with noncontrolling interest holders in consolidated
financial statements and will become effective for the Company’s 2010 fiscal year beginning on September 28,
2009. Compliance with the updated standard is not expected to have a material impact on the Company’s results
of operations, financial position or cash flows.
In November 2008, the FASB ratified the consensus reached by the Task Force in EITF Issue No. 08-6
regarding investments accounted for under the equity method. The guidance is incorporated in ASC Subtopic
323-10 and applies to all investments accounted for under the equity method and clarifies the accounting for
certain transactions and impairment considerations involving those investments. The updated standards become
effective for the Company’s 2010 fiscal year beginning on September 28, 2009. Compliance with the updated
standard is not expected to have a material impact on the Company’s results of operations, financial position or
cash flows.
In December 2008, the FASB issued an update to its authoritative literature for disclosures about pensions
and other postretirement benefits. The guidance is incorporated in ASC Sections 715-20-50 and 55, and requires
employers to disclose more information about how investment allocation decisions are made, more information
about major categories of plan assets, including concentrations of risk and fair-value measurements, and the fair-
value techniques and inputs used to measure plan assets. The updated disclosure requirements become effective
for the Company’s 2010 fiscal year ending on October 3, 2010.
In June 2009, the FASB issued an update to its authoritative literature for the consolidation of variable
interest entities (“VIE”). The guidance is incorporated in ASC Topic 810 and requires reporting entities to
evaluate former qualifying special purpose entities for consolidation, changes the approach to determining a
VIE’s primary beneficiary from a quantitative assessment to a qualitative assessment designed to identify a