Coca Cola 2008 Annual Report Download - page 41
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The following table presents the carrying values of our investments in equity and debt securities (in
millions):
Percentage
Carrying of Total
December 31, 2008 Value Assets
Equity method investments $ 5,316 13%
Securities classified as available-for-sale 522 1
Cost method investments 176 *
Securities classified as held-to-maturity 74 *
Securities classified as trading 49 *
Total $ 6,137 15%
*Accounts for less than 1 percent of the Company’s total assets.
Investments classified as trading securities are not assessed for impairment, since they are carried at fair
value with the change in fair value included in net income. We review our investments in equity and debt
securities that are accounted for using the equity method or cost method or that are classified as
available-for-sale or held-to-maturity each reporting period to determine whether a significant event or change
in circumstances has occurred that may have an adverse effect on the fair value of each investment. When such
events or changes occur, we evaluate the fair value compared to our cost basis in the investment. We also
perform this evaluation every reporting period for each investment for which our cost basis has exceeded the fair
value in the prior period. The fair values of most of our Company’s investments in publicly traded companies are
often readily available based on quoted market prices. For investments in nonpublicly traded companies,
management’s assessment of fair value is based on valuation methodologies including discounted cash flows,
estimates of sales proceeds and appraisals, as appropriate. We consider the assumptions that we believe
hypothetical marketplace participants would use in evaluating estimated future cash flows when employing the
discounted cash flow or estimates of sales proceeds valuation methodologies. The ability to accurately predict
future cash flows, especially in developing and emerging markets, may impact the determination of fair value.
In the event the fair value of an investment declines below our cost basis, management is required to
determine if the decline in fair value is other than temporary. If management determines the decline is other
than temporary, an impairment charge is recorded. Management’s assessment as to the nature of a decline in
fair value is based on, among other things, the length of time and the extent to which the market value has been
less than our cost basis, the financial condition and near-term prospects of the issuer, and our intent and ability
to retain the investment in the issuer for a period of time sufficient to allow for any anticipated recovery in
market value.
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