Humana 2011 Annual Report Download - page 106

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Humana Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
amount of the impairment loss, if any. Under the new guidance, we would not be required to calculate the fair
value of a reporting unit unless we determine, based on the qualitative assessment, that it is more likely than not
that its fair value is less than its carrying amount. The new guidance includes a number of events and
circumstances for an entity to consider in conducting the qualitative assessment. The new guidance is effective,
for us, beginning with annual and interim impairment tests performed in 2012. As the new guidance only affects
the manner of assessment of goodwill for impairment, it will not have a material impact on our results of
operations, financial condition, or cash flows.
In July 2011, the FASB issued new guidance regarding how health insurers should recognize and classify
fees mandated by the Health Insurance Reform Legislation. The Health Insurance Reform Legislation imposes a
non-deductible annual fee on health insurers for each calendar year beginning on or after January 1, 2014. The
guidance requires that the liability for the fee be estimated and recorded in full once qualifying insurance
coverage is provided in the applicable calendar year in which the fee is payable with a corresponding deferred
cost that is amortized to expense over the calendar year that it is payable. The new guidance is effective for us
when the fee is initially imposed in calendar year 2014.
In June 2011, the FASB issued new guidance requiring the presentation of other comprehensive income in a
statement presented with equal prominence to the other primary financial statements. The new guidance
eliminates the current option to report other comprehensive income and its components in the statement of
stockholders’ equity and requires one of two alternatives for the presentation of items of net income and other
comprehensive income: (1) in a single continuous statement referred to as the statement of comprehensive
income, or (2) in two separate, but consecutive statements. Under either alternative, each component of net
income and each component of other comprehensive income, together with totals for each, as well as total
comprehensive income would need to be displayed. The new guidance is effective for us, beginning with the
filing of our Form 10-Q for the three months ending March 31, 2012, with retrospective application required. As
permitted, we early adopted the new guidance with the filing of this Form 10-K for year ended December 31,
2011, electing to present net income and other comprehensive income in a single continuous statement of
comprehensive income. As the new guidance only affects the presentation of other comprehensive income, it did
not have a material impact on our results of operations, financial condition, or cash flows.
In May 2011, the FASB issued new guidance intended to improve the comparability of fair value
measurements presented and disclosed in financial statements prepared in accordance with accounting principles
generally accepted in the United States of America and those prepared in accordance with international financial
reporting standards. While the new guidance is largely consistent with existing fair value measurement
principles, it expands existing disclosure requirements for fair value measurements and makes other amendments
which could change how existing fair value measurement guidance is applied. The new guidance will be
effective for us beginning with the filing of our Form 10-Q for the three months ending March 31, 2012. The
adoption of the new guidance will not have a material impact on our results of operations, financial condition, or
cash flows.
3. ACQUISITIONS
Effective December 30, 2011, we acquired the California-based Medicare Advantage health maintenance
organization (HMO) MD Care, Inc., or MD Care. This acquisition expanded our Medicare footprint in California
and grew our Medicare enrollment.
On December 6, 2011, we acquired Anvita, Inc., or Anvita, a San Diego-based health care analytics
company. The Anvita acquisition provides scalable analytics solutions that produce clinical insights which we
expect to enhance our ability to improve the quality and lower the cost of health care for our members and
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