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HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 1: Summary of Significant Accounting Policies (Continued)
provisions, SFAS 158 also requires companies to measure the funded status of the plan as of the date
of their fiscal year end, effective for fiscal years ending after December 15, 2008. HP will adopt the
measurement provisions of SFAS 158 effective October 31, 2009 for the HP pension and post
retirement plans. HP does not expect the adoption of the measurement provisions of SFAS 158 will
have a material impact on its consolidated results of operations and financial condition.
In September 2006, the FASB issued SFAS No. 157, ‘‘Fair Value Measurements’’ (‘‘SFAS 157’’).
SFAS 157 defines fair value, establishes a framework for measuring fair value, and expands disclosures
about fair value measurements. SFAS 157 is effective for financial statements issued for fiscal years
beginning after November 15, 2007 and is required to be adopted by HP in the first quarter of fiscal
2009. In February 2008, the FASB issued FASB Staff Position (‘‘FSP’’) No. FAS 157-1, ‘‘Application of
FASB Statement No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements That
Address Fair Value Measurements for Purposes of Lease Classification or Measurement under
Statement 13’’ and also issued FSP No. 157-2, ‘‘Effective Date of FASB Statement No. 157,’’ which
collectively remove certain leasing transactions from the scope of SFAS 157 and partially delay the
effective date of SFAS 157 for one year for certain nonfinancial assets and liabilities. In October 2008,
the FASB also issued FSP SFAS 157-3, ‘‘Determining the Fair Value of a Financial Asset When the
Market for That Asset Is Not Active,’’ which clarifies the application of SFAS No. 157 in an inactive
market and illustrates how an entity would determine fair value when the market for a financial asset is
not active. Although the Company will continue to evaluate the application of SFAS 157, HP does not
currently believe adoption of SFAS 157 will have a material impact on its consolidated results of
operations and financial condition.
In February 2007, the FASB issued SFAS No. 159, ‘‘The Fair Value Option for Financial Assets
and Financial Liabilities—Including an amendment of FASB Statement No. 115’’ (‘‘SFAS 159’’).
SFAS 159 allows companies to elect to measure eligible financial instruments and certain other items at
fair value that are not required to be measured at fair value. SFAS 159 requires that unrealized gains
and losses on items for which the fair value option has been elected be reported in earnings at each
reporting date. SFAS 159 is effective for fiscal years beginning after November 15, 2007 and is required
to be adopted by HP in the first quarter of fiscal 2009. HP does not currently believe adoption will
have a material impact on its consolidated results of operations and financial condition since we do not
expect to apply the fair value option to any existing eligible assets or liabilities.
In December 2007, the FASB issued SFAS No. 141 (revised 2007), ‘‘Business Combinations’’
(‘‘SFAS 141(R)’’). SFAS 141(R) establishes 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 in connection with business
combinations. SFAS 141(R) also establishes disclosure requirements to enable the evaluation of the
nature and financial effects of the business combination. SFAS 141(R) is effective for fiscal years
beginning on or after December 15, 2008 and will be adopted by HP in the first quarter of fiscal 2010.
HP continues to evaluate the impact the adoption of SFAS 141(R) will have on its consolidated results
of operations and financial condition, which impact will be largely dependent on the size and nature of
the business combinations completed after the adoption of this statement.
In December 2007, the FASB issued SFAS No. 160, ‘‘Noncontrolling Interests in Consolidated
Financial Statements—an amendment of Accounting Research Bulletin No. 51’’ (‘‘SFAS 160’’).
SFAS 160 establishes accounting and reporting standards for ownership interests in subsidiaries held by
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