LabCorp 2008 Annual Report Download - page 55

Notes to Consolidated Financial Statements
(Dollars and shares in millions, except per share data)
Laboratory Corporation of America
Laboratory Corporation of America® Holdings 2008 53
20) New Accounting Pronouncements
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 permits an entity to measure many financial instruments and certain other items at
fair value that are not currently required to be measured at fair value. The Company adopted
this Statement as of January 1, 2008 and has elected not to apply the fair value option to any
of its financial instruments.
In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated
Financial Statements – an amendment of ARB No. 51.” SFAS No. 160 requires all entities to
report noncontrolling (minority) interests in subsidiaries as equity in the consolidated financial
statements. This Statement is effective for the Company as of January 1, 2009. Earlier adoption
is prohibited. Beginning in 2009, the Company will report minority interests in subsidiaries as
equity in accordance with SFAS No. 160.
In December 2007, the FASB issued SFAS No. 141(R), a revised version of SFAS No. 141,
“Business Combinations.” The revision is intended to simplify existing guidance and converge
rulemaking under U.S. generally accepted accounting principles (GAAP) with international
accounting rules. This statement applies prospectively to business combinations where the
acquisition date is on or after the beginning of the first annual reporting period beginning on
or after December 15, 2008. An entity may not apply it before that date. Beginning in 2009,
the Company will record acquisitions in accordance with SFAS 141(R).
In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments
and Hedging Activities – an amendment of FASB Statement No. 133.” SFAS 161 requires
additional disclosures about the objectives of using derivative instruments, the method by which
the derivative instruments and related hedged items are accounted for under FASB Statement
No. 133 and its related interpretations, and the effect of derivative instruments and related
hedged items on financial position, financial performance, and cash flows. SFAS 161 also
requires disclosure of the fair values of derivative instruments and their gains and losses in a
tabular format. SFAS 161 is effective for fiscal years and interim periods beginning after
November 15, 2008. Beginning in the first quarter of 2009, the Company will provide the
additional disclosures in accordance with SFAS 161.
In April 2008, the FASB issued FASB Staff Position No. FAS 142-3, “Determination of
the Useful Life of Intangible Assets,” which 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 FASB Statement No. 142, “Goodwill and Other Intangible Assets.” This
pronouncement requires enhanced disclosures concerning a company’s treatment of costs
incurred to renew or extend the term of a recognized intangible asset. FSP 142-3 is effective for
fiscal years beginning after December 15, 2008. The Company does not expect the adoption of
FSP 142-3 will have a material impact on its consolidated financial statements.
In May 2008, the FASB issued SFAS 162, “The Hierarchy of Generally Accepted Accounting
Principles.” SFAS 162 identifies the sources of accounting principles and the framework for
selecting the accounting principles to be used. Any effect of applying the provisions of this
statement will be reported as a change in accounting principle in accordance with SFAS No. 154,
“Accounting Changes and Error Corrections.” SFAS 162 is effective sixty days following the
SEC’s 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 does not expect the adoption of this statement will have a material impact on its
consolidated financial statements.
In May 2008, the FASB issued Staff Position No. APB 14-1, “Accounting for Convertible
Debt Instruments that May be Settled in Cash Upon Conversion.” APB 14-1 requires that the
liability and equity components of convertible debt instruments that may be settled in cash upon
conversion (including partial cash settlement) be separately accounted for in a manner that
reflects an issuer’s nonconvertible debt borrowing rate. The resulting debt discount is amortized
over the period the convertible debt is expected to be outstanding as additional non-cash interest