Coca Cola 2008 Annual Report Download - page 87

THE COCA-COLA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Retirement-Related Benefits
Using appropriate actuarial methods and assumptions, our Company accounts for defined benefit pension
plans in accordance with SFAS No. 87, ‘‘Employers’ Accounting for Pensions,’’ and we account for our
nonpension postretirement benefits in accordance with SFAS No. 106, ‘‘Employers’ Accounting for
Postretirement Benefits Other Than Pensions,’’ as amended by SFAS No. 158, ‘‘Employers’ Accounting for
Defined Benefit Pension and Other Postretirement Plans—an amendment of FASB Statements No. 87, 88, 106,
and 132(R).’’ Effective December 31, 2006 for our Company, SFAS No. 158 required that previously
unrecognized actuarial gains or losses, prior service costs or credits and transition obligations or assets be
recognized generally through adjustments to accumulated other comprehensive income and credits to prepaid
benefit cost or accrued benefit liability. As a result of these adjustments, the current funded status of defined
benefit pension plans and other postretirement benefit plans is reflected in the Company’s consolidated balance
sheets as of December 31, 2008 and 2007. Refer to Note 16.
Our equity method investees also adopted SFAS No. 158 effective December 31, 2006. Refer to Note 3 for
the impact on our consolidated balance sheet resulting from the adoption of SFAS No. 158 by our equity method
investees.
Contingencies
Our Company is involved in various legal proceedings and tax matters. Due to their nature, such legal
proceedings and tax matters involve inherent uncertainties including, but not limited to, court rulings,
negotiations between affected parties and governmental actions. Management assesses the probability of loss for
such contingencies and accrues a liability and/or discloses the relevant circumstances, as appropriate. Refer to
Note 13.
Business Combinations
In accordance with SFAS No. 141, ‘‘Business Combinations,’’ we account for all business combinations by
the purchase method. Furthermore, we recognize intangible assets apart from goodwill if they arise from
contractual or legal rights or if they are separable from goodwill.
Recent Accounting Standards and Pronouncements
In December 2007, the FASB issued SFAS No. 141 (revised 2007), ‘‘Business Combinations.’’ SFAS
No. 141(R) amends the principles and requirements for how an acquirer recognizes and measures in its financial
statements the identifiable assets acquired, the liabilities assumed, any noncontrolling interest in the acquiree
and the goodwill acquired. SFAS No. 141(R) also establishes disclosure requirements to enable the evaluation of
the nature and financial effects of the business combination. SFAS No. 141(R) is effective for our Company on
January 1, 2009, and the Company will apply SFAS No. 141(R) prospectively to all business combinations
subsequent to the effective date. The Company continues to evaluate the impact that the adoption of SFAS
No. 141(R) will have on our consolidated financial statements, which mainly depends on the size and nature of
business combinations completed after the date of adoption.
In December 2007, the FASB issued SFAS No. 160, ‘‘Noncontrolling Interests in Consolidated Financial
Statements—an amendment of Accounting Research Bulletin No. 51.’’ SFAS No. 160 establishes accounting and
reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary.
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