Coca Cola 2010 Annual Report Download - page 145

Nonrecurring Fair Value Measurements
In addition to assets and liabilities that are recorded at fair value on a recurring basis, the Company records assets and
liabilities at fair value on a nonrecurring basis as required by accounting principles generally accepted in the United
States. Generally, assets are recorded at fair value on a nonrecurring basis as a result of impairment charges. Assets
measured at fair value on a nonrecurring basis for the years ended December 31, 2010 and 2009, are summarized below
(in millions):
Gains (Losses)
December 31, 2010 2009
Investment in formerly unconsolidated subsidiary $ 4,9781$—
Retained investment in formerly consolidated subsidiary 122—
Available-for-sale securities (26)3—
Equity method investments (15)4—
Cost method investments —(27)5
Bottler franchise rights —(23)6
Buildings and improvements —(17)7
Total $ 4,949 $ (67)
1The Company recognized a gain on our previously held investment in CCE, which had been accounted for under the equity method
of accounting prior to our acquisition of CCE’s North American business. Accounting principles generally accepted in the United
States require the acquirer to remeasure its previously held noncontrolling equity interest in the acquired entity to fair value as of
the acquisition date and recognize any gains or losses in earnings. The Company remeasured our equity interest in CCE based on
Level 1 inputs. Refer to Note 2.
2The Company sold 50 percent of our investment in Le˜
ao Junior, which was a wholly-owned subsidiary prior to this transaction. The
gain on the transaction consisted of two parts: (1) the difference between the consideration received and 50 percent of the carrying
value of our investment and (2) the fair value adjustment for our remaining 50 percent ownership. The gain in the table above
represents the portion of the total gain related to the remeasurement of our retained investment in Le˜ ao Junior, which was based
on Level 3 inputs. Refer to Note 17.
3The Company recognized other-than-temporary impairment charges on certain available-for-sale securities. The aggregate carrying
value of these securities prior to recognizing the impairment charges was approximately $131 million. The Company determined the
fair value of these securities based on Level 1 and Level 2 inputs. The fair value of the Level 2 security was based on a dealer
quotation. Refer to Note 17 for further discussion of the factors leading to the recognition of these other-than-temporary
impairment charges.
4The Company recognized an other-than-temporary impairment charge of approximately $15 million. The carrying value of the
Company’s investment prior to recognizing the impairment was $15 million. The Company determined that the fair value of the
investment was zero based on Level 3 inputs.
5The Company recognized an other-than-temporary impairment charge of approximately $27 million. The carrying value of the
Company’s investment prior to recognizing the impairment was approximately $27 million. The Company determined that the fair
value of the investment was zero based on Level 3 inputs. Refer to Note 17 for further discussion of the factors leading to the
recognition of the impairment.
6The Company recognized a charge of approximately $23 million related to the impairment of an indefinite-lived intangible asset.
The carrying value of the asset prior to the impairment was approximately $25 million. The fair value of the asset was estimated
based on Level 3 inputs. Refer to Note 17.
7The Company recognized an impairment charge of approximately $17 million due to a change in disposal strategy related to a
building that is no longer occupied. The carrying value of the asset prior to recognizing the impairment was approximately
$17 million. Refer to Note 17.
Fair Value Measurements for Pension and Other Postretirement Benefit Plans
The fair value hierarchy discussed above is not only applicable to assets and liabilities that are included in our
consolidated balance sheets, but is also applied to certain other assets that indirectly impact our consolidated financial
statements. For example, our Company sponsors and/or contributes to a number of pension and other postretirement
benefit plans. Assets contributed by the Company become the property of the individual plans. Even though the
Company no longer has control over these assets, we are indirectly impacted by subsequent fair value adjustments to
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