Raytheon 2011 Annual Report Download - page 95

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
87
Note 2: Accounting Standards
In June 2011, the Financial Accounting Standards Board (FASB) issued a new accounting standard that eliminates the option
to present other comprehensive income (OCI) in the statement of stockholders' equity and instead requires net income, the
components of OCI, and total comprehensive income to be presented in either one continuous statement or in two separate,
but consecutive, statements. The standard also requires that items reclassified from OCI to net income be presented on the
face of the financial statements. However, in December 2011, the FASB finalized a proposal to defer the requirement to present
reclassifications from OCI to net income on the face of the financial statements and require that reclassification adjustments
be disclosed in the notes to the financial statements, consistent with the existing disclosure requirements. The deferral does
not change the requirement to present net income, components of OCI, and total comprehensive income in either one continuous
statement or two separate but consecutive statements. This guidance is effective for the periods beginning after December 15,
2011 and early application is permitted. We have elected to adopt the requirements early with retrospective application. As
of the year ending December 31, 2011, we have presented total comprehensive income in two separate, but consecutive,
statements. Refer to the consolidated statements of operations and consolidated statements of comprehensive income for this
revised presentation. The adoption of this standard only required a change in the presentation of OCI in our consolidated
financial statements and did not have any impact on our financial position, results of operations or liquidity.
In May 2011, the FASB issued amended guidance that clarifies the application of existing fair value measurement and increases
certain related disclosure requirements about measuring fair value. This guidance is effective for the periods beginning after
December 15, 2011 and early application is prohibited. The adoption of this standard is not expected to have a material impact
on our financial position, results of operations or liquidity.
In September 2011, the FASB issued amended guidance on goodwill impairment testing that provides companies with the
option to make an initial qualitative evaluation, based on the entity's events and circumstances, to determine the likelihood
of goodwill impairment. This guidance is effective for annual and interim goodwill impairment tests performed for fiscal
years beginning after December 15, 2011, with early application permitted. The adoption of this standard is not expected to
have a material impact on our financial position, results of operations or liquidity.
Other new pronouncements issued but not effective until after December 31, 2011, are not expected to have a material impact
on our financial position, results of operations or liquidity.
Note 3: Acquisitions
In pursuing our business strategies, we acquire and make investments in certain businesses that meet strategic and financial
criteria.
On January 31, 2011, we acquired Applied Signal Technology, Inc., subsequently renamed Raytheon Applied Signal
Technology, Inc. (RAST) for $500 million in cash, net of $25 million of cash and cash equivalents acquired, and exclusive
of retention and management incentive payments. RAST provides advanced intelligence, surveillance, and reconnaissance
(ISR) solutions to enhance global security. The acquisition is part of our strategy to extend and enhance our Space and Airborne
Systems (SAS) offerings related to certain classified and Department of Defense markets. In connection with this acquisition,
we recorded $387 million of goodwill, all of which was allocated to the Company's SAS segment, primarily related to expected
synergies from combining operations and the value of RAST's assembled workforce, and $89 million in intangible assets,
primarily related to contractual relationships, license agreements and trade names with a weighted average life of seven years.