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McKESSON CORPORATION
FINANCIAL NOTES (Continued)
65
Recently Adopted Accounting Pronouncements
Accounting for Transfers of Financial Assets: On April 1, 2010, we adopted amended accounting guidance for
transfers of financial assets, including securitization transactions, in which entities have continued exposure to risks
related to transferred financial assets. This amendment changed the requirements for derecognizing financial assets
and expanded the disclosure requirements for such transactions. As a result of the amended accounting guidance,
from April 1, 2010 forward, accounts receivable transactions under our accounts receivable sales facility are
accounted for as secured borrowings rather than asset sales.
Consolidations: On April 1, 2010, we adopted amended accounting guidance for consolidation of VIEs. The
new guidance eliminates the quantitative approach previously required for determining the primary beneficiary of a
VIE and requires ongoing qualitative reassessments of whether an enterprise is the primary beneficiary, including
ongoing assessments of control over such entities. The adoption of this amended guidance did not have a material
effect on our consolidated financial statements.
Financing Receivables: On October 1, 2010, we adopted amended accounting guidance which expands
disclosures regarding credit quality and the related allowance for credit losses of financing receivables. On January
1, 2011, we adopted additional disclosure requirements regarding activity during a reporting period. The adoption
of the amended guidance did not have an impact on our consolidated financial results as these changes relate only to
disclosures. Because our financing receivables are not material to our consolidated financial statements, the
disclosures required under the new accounting guidance have been omitted from our Financial Notes with the
exception of certain accounting policy disclosures which describe how we assess and monitor credit risk associated
with our financing receivables.
Fair Value Measurements and Disclosures: In January 2010, the Financial Accounting Standards Board
(“FASB”) issued amended standards that clarify and provide additional disclosure requirements related to recurring
and non-recurring fair value measurements of assets and liabilities. These standards also amend requirements for
employer’s disclosure about post retirement benefit plan assets to conform to the fair value disclosure requirement.
On January 1, 2010, we adopted the amended standards, except for the disclosures about the roll-forward of activity
in Level 3 (measurement using significant unobservable inputs) fair value measurements, which are effective for us
on April 1, 2011. The adoption of the amended guidance did not have a material effect on our consolidated financial
statements.
Newly Issued Accounting Pronouncements
Revenue Recognition: In October 2009, the FASB issued amended accounting guidance for multiple-element
arrangements. The amended guidance eliminates the use of the residual method and incorporates the use of an
estimated selling price to allocate arrangement consideration. The amended guidance will become effective for us
for multiple-element arrangements entered into or materially modified on or after April 1, 2011. We do not
anticipate the adoption of the amended guidance to have a material effect on our consolidated financial statements.
In October 2009, the FASB issued amended guidance for certain revenue arrangements that include software
elements. The guidance amends pre-existing software revenue guidance by removing from its scope tangible
products that contain both software and non-software components that function together to deliver the product’s
functionality. The amended guidance will become effective for us for revenue arrangements entered into or
materially modified on or after April 1, 2011. We do not anticipate the adoption of the amended guidance to have a
material effect on our consolidated financial statements.
In April 2010, the FASB issued amended accounting guidance for vendors who apply the milestone method of
revenue recognition to research and development arrangements. The amended guidance applies to arrangements
with payments that are contingent, at inception, upon achieving substantively uncertain future events or
circumstances. The amended guidance is effective on a prospective basis for us for milestones achieved on or after
April 1, 2011. We do not anticipate the adoption of the amended guidance to have a material effect on our
consolidated financial statements.