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McKESSON CORPORATION
FINANCIAL NOTES (Continued)
64
Business Combinations: On April 1, 2009, we adopted two sets of standards affecting business combinations.
One set of standards amends the recognition and measurement of identifiable assets and goodwill acquired,
liabilities assumed and any noncontrolling interest in the acquiree in a business combination. These standards also
provide disclosure requirements to enable users of the financial statements to evaluate the nature and financial
effects of the business combination. In addition, adjustments made to valuation allowances on deferred taxes and
acquired tax contingencies related to acquisitions made prior to April 1, 2009 fall within the scope of these
standards.
The second set of standards addresses accounting for assets acquired and liabilities assumed that arise from
contingencies in a business combination. These standards address application issues raised on the initial recognition
and measurement, subsequent measurement and accounting for and disclosure of these assets and liabilities. The
adoption of these standards did not have a material effect on our consolidated financial statements; however, it may
have an effect on the accounting for any future acquisitions or divestitures.
Consolidation: On April 1, 2009, we adopted new standards on noncontrolling interests in consolidated
financial statements. These standards require reporting entities to present noncontrolling interests in any of their
consolidated entities as equity (as opposed to a liability or mezzanine equity) and provide guidance on the
accounting for transactions between an entity and noncontrolling interests. This adoption did not have a material
effect on our consolidated financial statements; however, these standards may have an effect on any future
investments or divestitures of our investments.
On January 1, 2010, we adopted amended standards that clarify the accounting and disclosure for a decrease in
ownership in a subsidiary or an exchange of a group of assets that is a business or nonprofit activity. This adoption
did not have a material effect on our consolidated financial statements; however, these standards may affect future
divestitures of subsidiaries or groups of assets within its scope.
Intangibles – Goodwill and Other: On April 1, 2009, we adopted two new standards affecting intangible assets.
One of the standards addressed factors that should be considered in developing renewal or extension assumptions
used to determine the useful life of a recognized intangible asset.
The second standard affected accounting for defensive intangible assets, which are acquired assets that an entity
does not intend to actively use, but will hold (lock up) to prevent others from obtaining access to them. These
standards do not address intangible assets that are used in research and development activities. Neither of these
standards had a material effect on our consolidated financial statements.
Earnings Per Share: On April 1, 2009, we adopted new standards that address whether instruments granted in
share-based compensation transactions are participating securities. The new standards conclude that unvested share-
based awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are
participating securities and shall be included in the computation of basic earnings per share pursuant to the two-class
method. This adoption did not have a material effect on our consolidated financial statements.
Investments – Equity Method and Joint Ventures: On April 1, 2009, we adopted new standards on the initial
measurement of an equity method investment, testing of the investment for other-than-temporary impairment and
accounting for any subsequent equity activities by the investee. This adoption did not have a material effect on our
consolidated financial statements.
Investments – Debt and Equity Securities: On April 1, 2009, we adopted new standards that revise the criteria
for recognizing other-than-temporary impairments of debt securities for which changes in fair value are not regularly
recognized in earnings and the financial statement presentation of such impairments. The standards also expand and
increase the frequency of disclosures related to other-than-temporary impairments of both debt and equity securities.
This adoption did not have a material effect on our consolidated financial statements.