Xcel Energy 2008 Annual Report Download - page 104

2. Accounting Pronouncements
Recently Issued
Business Combinations (SFAS No. 141 (revised 2007)) — In December 2007, the FASB issued SFAS No. 141R, which
establishes principles and requirements for how an acquirer in a business combination recognizes and measures in its
financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest; recognizes
and measures the goodwill acquired in the business combination or a gain from a bargain purchase; and determines
what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of
the business combination. SFAS No. 141R is to be applied prospectively to business combinations for which the
acquisition date is on or after the beginning of an entity’s fiscal year that begins on or after Dec. 15, 2008. Xcel Energy
will apply SFAS No. 141R to business combinations occurring subsequent to Jan. 1, 2009.
Noncontrolling Interests in Consolidated Financial Statements, an Amendment of ARB No. 51 (SFAS No. 160) — In
December 2007, the FASB issued SFAS No. 160, which establishes accounting and reporting standards that require the
ownership interest in subsidiaries held by parties other than the parent be clearly identified and presented in the
consolidated balance sheets within equity, but separate from the parent’s equity; the amount of consolidated net income
attributable to the parent and the noncontrolling interest be clearly identified and presented on the face of the
consolidated statement of earnings; and changes in a parent’s ownership interest while the parent retains its controlling
financial interest in its subsidiary be accounted for consistently as equity transactions. This statement is effective for
fiscal years and interim periods beginning on or after Dec. 15, 2008. Xcel Energy does not expect the implementation
of SFAS No. 160 to have a material impact on its consolidated financial statements.
Disclosures about Derivative Instruments and Hedging Activities, an Amendment of FASB Statement No. 133 (SFAS
No. 161) — In March 2008, the FASB issued SFAS No. 161, which is intended to enhance disclosures to help users of
the financial statements better understand how derivative instruments and hedging activities affect an entity’s financial
position, financial performance and cash flows. SFAS No. 161 amends and expands the disclosure requirements of SFAS
No. 133, Accounting for Derivative Instruments and Hedging Activities, to require disclosures of objectives and strategies
for using derivatives, gains and losses on derivative instruments, and credit-risk-related contingent features in derivative
agreements. SFAS No. 161 is effective for fiscal years and interim periods beginning after Nov. 15, 2008, with early
application encouraged. Xcel Energy does not expect the implementation of SFAS No. 161 to have a material impact
on its consolidated financial statements.
Employers’ Disclosures about Postretirement Benefit Plan Assets (FSP FAS 132(R)-1) — In December 2008, the FASB
issued FSP FAS 132(R)-1, which amends SFAS No. 132 (revised 2003), Employers’ Disclosures about Pensions and Other
Postretirement Benefits, to expand an employer’s required disclosures about plan assets of a defined benefit pension or
other postretirement plan to include investment policies and strategies, major categories of plan assets, information
regarding fair value measurements, and significant concentrations of credit risk. FSP FAS 132(R)-1 is effective for fiscal
years ending after Dec. 15, 2009. Xcel Energy does not expect the implementation of FSP FAS 132(R)-1 to have a
material impact on its consolidated financial statements.
Recently Adopted
Fair Value Measurements (SFAS No. 157) — In September 2006, the FASB issued SFAS No. 157, which provides a
single definition of fair value, together with a framework for measuring it, and requires additional disclosure about the
use of fair value to measure assets and liabilities. SFAS No. 157 also emphasizes that fair value is a market-based
measurement, and sets out a fair value hierarchy with the highest priority being quoted prices in active markets. Fair
value measurements are disclosed by level within that hierarchy. SFAS No. 157 was effective for financial statements
issued for fiscal years beginning after Nov. 15, 2007.
On Jan. 1, 2008, Xcel Energy adopted SFAS No. 157 for all assets and liabilities measured at fair value except for
non-financial assets and non-financial liabilities measured at fair value on a non-recurring basis, as permitted by FSP
FAS 157-2, Effective Date of FASB Statement No. 157. The adoption did not have a material impact on Xcel Energy’s
consolidated financial statements. For additional discussion and SFAS No. 157 required disclosures, see Note 15 to the
consolidated financial statements.
The Fair Value Option for Financial Assets and Financial Liabilities — Including an Amendment of FASB Statement
No. 115 (SFAS No. 159) — In February 2007, the FASB issued SFAS No. 159, which provides companies with an
option to measure, at specified election dates, many financial instruments and certain other items at fair value that are
not currently measured at fair value. A company that adopts SFAS No. 159 will report unrealized gains and losses on
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