Kimberly-Clark 2008 Annual Report Download - page 67

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KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
In December 2007, the FASB issued SFAS No. 141(R), Business Combinations (“SFAS 141(R)”). SFAS
141(R) requires the acquirer in a business combination to:
• recognize 100 percent of the fair values of acquired assets, including goodwill, and assumed liabilities,
with only limited exceptions, even if the acquirer has not acquired 100 percent of the target entity,
• fair value contingent consideration arrangements at the acquisition date,
• expense transaction costs as incurred rather than included as part of the fair value of an acquirer’s
interest,
• fair value certain pre-acquisition contingencies, such as environmental or legal issues,
• limit accrual of the costs for a restructuring plan to pre-acquisition date restructuring obligations, and
• capitalize the value of acquired research and development as an indefinite-lived intangible asset, subject
to impairment accounting, rather than being expensed at the acquisition date.
SFAS 141(R) is effective for business combinations for which the acquisition date occurs during fiscal years
beginning on or after December 15, 2008. Adoption is prospective, and early adoption is not permitted. Adoption
of SFAS 141(R) is not expected to have a material effect on the Corporation’s financial statements.
In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial
Statements, an amendment of ARB No. 51 (“SFAS 160”).SFAS 160 clarifies the classification of noncontrolling
interests (i.e., minority owners’ interests in subsidiaries) in consolidated balance sheets and the accounting for
and reporting of transactions between the reporting entity and holders of such noncontrolling interests. Under
SFAS 160:
• Noncontrolling interests are reported as an element of consolidated equity, thereby eliminating the
current practice of classifying minority owners’ interests within a mezzanine section of the balance
sheet.
• The current practice of reporting minority owners’ share of subsidiaries’ net income will change.
Reported net income will include the total income of all consolidated subsidiaries, with separate
disclosure on the face of the income statement of the split of net income between the controlling and
noncontrolling interests.
• Increases and decreases in the noncontrolling ownership interest amount will be accounted for as equity
transactions. If the controlling interest loses control and deconsolidates a subsidiary, full gain or loss on
the transition will be recognized.
SFAS 160 is effective for fiscal years, and interim periods within fiscal years, beginning on or after
December 15, 2008. Early adoption is not permitted. Adoption is prospective, except for the following
provisions, which are required to be adopted retrospectively:
• Noncontrolling interests are required to be reclassified from the mezzanine to equity, separate from the
parent’s shareholders’ equity, in the consolidated balance sheet.
• Consolidated net income must be recast to include net income attributable to both controlling and
noncontrolling interests.
Except for the reclassification of minority owners’ interests into equity and the inclusion of all of the
income of less than 100 percent owned consolidated subsidiaries in net income, adoption of SFAS 160 is not
expected to have a material effect on the Corporation’s financial statements.
47