AT&T Wireless 2009 Annual Report Download - page 66

64 AT&T 09 AR
Notes to Consolidated Financial Statements
Dollars in millions except per share amounts
Noncontrolling Interests Reporting In December 2007, the
FASB issued a standard that requires noncontrolling interests
held by parties other than the parent in subsidiaries to be
clearly identified, labeled, and presented in the consolidated
balance sheets within stockholders’ equity, but separate from
the parent’s equity. For us, the new standard became
effective January 1, 2009, with restatement of prior financial
statements. Instead of including noncontrolling interest in
Other income (expense) – net in our consolidated statements
of income, we disclose three measures of net income: net
income, net income attributable to noncontrolling interest,
and net income attributable to AT&T, and our operating cash
flows in our consolidated statements of cash flows reflect
net income. Furthermore, we continue to base our basic
and diluted earnings per share calculations on net income
attributable to AT&T.
In January 2010, the FASB issued guidance that amends
accounting and disclosure requirements for a decrease in
ownership in a business under existing GAAP standards for
consolidations. It also clarifies the types of businesses that
are in the scope of these consolidations. As required by this
guidance, we retroactively applied the amendments as of
January 1, 2009, which did not have a material impact on
our financial statements or footnote disclosures.
Fair Value Measurements and Disclosures In April 2009,
the FASB issued staff positions that require enhanced
disclosures, including interim disclosures, on financial
instruments, determination of fair value in turbulent markets,
and recognition and presentation of other-than-temporary
impairments. These staff positions were effective for interim
and annual reporting periods beginning in our second quarter
of 2009. They increased our interim disclosures but have
not had a material impact on our financial position or
results of operations.
In August 2009, the FASB issued “Measuring Liabilities at
Fair Value” (ASU 2009-05), which amends existing GAAP for
fair value measurement guidance by clarifying the fair value
measurement requirements for liabilities that lack a quoted
price in an active market. Per the Codification, a valuation
technique based on a quoted market price for the identical or
similar liability when traded as an asset or another valuation
technique (e.g., an income or market approach) that is
consistent with the underlying principles of GAAP for fair
value measurements would be appropriate. ASU 2009-05
also clarifies that a reporting entity is not required to add or
adjust valuation inputs to compensate for transfer restrictions
on in-scope liabilities. ASU 2009-05 was effective August
2009, the issuance date, and has not had a material impact
on our financial position or results of operations.
In September 2009, the FASB issued “Investments in
Certain Entities That Calculate Net Asset Value per Share
(or Its Equivalent)” (ASU 2009-12), which provides guidance
for an investor on using the net asset value per share
provided by an investee to estimate the fair value of an
alternative investment when the fair value for the primary
investment is not readily determinable. It affects certain
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation Throughout this document, AT&T Inc.
is referred to as “AT&T,” “we” or the “Company.” The consolidated
financial statements have been prepared pursuant to
Regulation S-X and other applicable rules of the Securities
and Exchange Commission. The consolidated financial
statements include the accounts of the Company and our
majority-owned subsidiaries and affiliates. Our subsidiaries
and affiliates operate in the communications services industry
both domestically and internationally, providing wireless and
wireline communications services and equipment, managed
networking, wholesale services, and advertising solutions.
All significant intercompany transactions are eliminated
in the consolidation process. Investments in partnerships
and less-than-majority-owned subsidiaries where we have
significant influence are accounted for under the equity
method. Earnings from certain foreign equity investments
accounted for using the equity method are included for
periods ended within up to one month of our year-end
(see Note 7).
The preparation of financial statements in conformity with
U.S. generally accepted accounting principles (GAAP) requires
management to make estimates and assumptions that
affect the amounts reported in the financial statements and
accompanying notes, including estimates of probable losses
and expenses. Actual results could differ from those estimates.
We have reclassified certain amounts in prior-period financial
statements to conform to the current period’s presentation.
Recent Accounting Standards
Accounting Standards Codification In June 2009, the
Financial Accounting Standards Board (FASB) issued standards
that established the FASB Accounting Standards Codification
(ASC or Codification) as the source of authoritative GAAP by
the FASB for nongovernmental entities. The ASC supersedes
all non-SEC accounting and reporting standards that existed
at the ASC’s effective date. The FASB uses Accounting
Standards Updates (ASU) to amend the ASC. We refer to
ASUs throughout our interim and annual reports where
deemed relevant and make general references to pre-
Codification standards (e.g., GAAP standards for acquisitions).
These standards were effective for interim and annual periods
ending after September 15, 2009 (i.e., the quarterly period
ended September 30, 2009, for us).
Subsequent Events In May 2009, the FASB issued a
standard that established general standards of accounting
for and disclosing events that occur after the balance sheet
date but before financial statements are issued or are
available for issuance. They were effective for interim and
annual periods ending after June 15, 2009 (i.e., the quarterly
period ended June 30, 2009, for us). In preparing the
accompanying audited consolidated financial statements,
we have reviewed all known events that have occurred after
December 31, 2009, and through February 25, 2010, the
filing date of our Annual Report on Form 10-K, for inclusion
in the financial statements and footnotes.