Safeway 2008 Annual Report Download - page 54

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SAFEWAY INC. AND SUBSIDIARIES
Energy Contracts The Company has entered into contracts to purchase electricity and natural gas at fixed prices for a
portion of its energy needs. Safeway expects to take delivery of the electricity and natural gas in the normal course of
business, and these contracts are not net settled. Since these contracts qualify for the normal purchase exception of SFAS
No. 133, “Accounting for Derivative Instruments and Hedging Activities,” they are not marked to market. Energy
purchased under these contracts is expensed as delivered.
New Accounting Standards
In March 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 161, “Disclosures about Derivative
Instruments and Hedging Activities.” SFAS No. 161 is intended to improve financial reporting about derivative
instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand the effects
of the derivative instruments on an entity’s financial position, financial performance and cash flows. It is effective for
financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application
encouraged. Safeway is currently assessing the potential impact of SFAS No. 161 on its financial statements.
In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements – an
amendment of ARB No. 51.” SFAS No. 160 establishes accounting and reporting standards for the noncontrolling interest
in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an
ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements.
Additionally, SFAS No. 160 requires expanded disclosures in the consolidated financial statements. SFAS No. 160 is
effective for fiscal years and interim periods beginning on or after December 15, 2008. The Company is currently
assessing the potential impact of SFAS No. 160 on its financial statements.
In December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations” (“SFAS No. 141R”). SFAS
No. 141R established principles and requirements for how an entity which obtains control of one or more businesses
(1) recognizes and measures the identifiable assets acquired, the liabilities assumed and any noncontrolling interest in the
acquiree, (2) recognizes and measures the goodwill acquired in the business combination and (3) determines what
information to disclose regarding business combinations. SFAS No. 141R applies prospectively to business combinations
for which the acquisition date is on or after the beginning of the first annual report period beginning on or after
December 15, 2008.
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