DTE Energy 2008 Annual Report Download - page 15

Business Combinations
In December 2007, the FASB issued SFAS No. 141(R), Business Combinations, to improve the relevance, representational faithfulness and
comparability of the information that a reporting entity provides in its financial reports about a business combination and its effects. To
accomplish this, SFAS No. 141(R) requires the acquiring entity in a business combination to recognize all the assets acquired and liabilities
assumed in the transaction; establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities
assumed; and requires the acquirer to disclose to investors and other users all of the information needed to evaluate and understand the nature
and financial effect of the business combination. SFAS No. 141(R) is applied prospectively to business combinations entered into by the
Company after January 1, 2009, with earlier adoption prohibited. The Company will apply the requirements of SFAS No. 141 (R) to business
combinations consummated after January 1, 2009.
GAAP Hierarchy
In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles. This statement identifies the
sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements under GAAP.
SFAS No. 162 is effective 60 days following the approval of the Public Company Accounting Oversight Board amendments to AU section
411, The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles. The Company will adopt SFAS No. 162
once effective. The adoption is not expected to have a material impact on its consolidated financial statements.
Useful Life of Intangible Assets
In May 2008, the FASB issued FSP 142-3, Determination of the Useful Life of Intangible Assets. This FSP amends the factors that should be
considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS
No. 142, Goodwill and Other Intangible Assets. For a recognized intangible asset, an entity shall disclose information that enables users to
assess the extent to which the expected future cash flows associated with the asset are affected by the entity’s intent and/or ability to renew or
extend the arrangement. This FSP is effective for financial statements issued for fiscal years and interim periods beginning after December 15,
2008. The FSP will not have a material impact on the Company’s consolidated financial statements.
Disclosures about Derivative Instruments and Guarantees
In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities — an amendment of FASB
Statement No. 133. This Statement requires enhanced disclosures about an entity’s derivative and hedging activities. SFAS No. 161 is effective
for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged.
Comparative disclosures for earlier periods at initial adoption are encouraged but not required. The Company will adopt SFAS No. 161 on
January 1, 2009.
In September 2008, the FASB issued FSP No. 133-1 and FIN 45-4, Disclosures about Credit Derivatives and Certain Guarantees: An
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mendment of FASB Statement No. 133 and FASB Interpretation No. 45; and Clarification of the Effective Date of FASB Statement No. 161.
This FSP is intended to improve disclosures about credit derivatives by requiring more information about the potential adverse effects of
changes in credit risk on the financial position, financial performance, and cash flows of the sellers of credit derivatives. This FSP also requires
additional disclosures about the current status of the payment/performance risk of a guarantee. The provisions of the FSP that amend SFAS
No. 133 and FIN 45 are effective for reporting periods ending after November 15, 2008. The FSP also clarifies that the disclosures required by
SFAS No. 161 should be provided for any reporting period (annual or interim) beginning after November 15, 2008. The Company has adopted
these pronouncements as of December 31, 2008.
Noncontrolling Interests in Consolidated Financial Statements
In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements — an Amendment of ARB
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o. 51. This Statement establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation
of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be
reported as equity in the consolidated financial statements. SFAS No. 160 is effective for fiscal years, and interim periods within those years,
beginning on or after December 15, 2008. Earlier adoption is prohibited. This Statement shall be applied prospectively as of the beginning of
the fiscal year in which this Statement is initially applied, except for the presentation and disclosure requirements. The presentation and
disclosure requirements shall be applied retrospectively for all periods presented. The
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