Proctor and Gamble 2008 Annual Report Download - page 64

Amountsinmillionsofdollarsexceptpershareamountsorasotherwisespecied.
62 TheProcter&GambleCompany NotestoConsolidatedFinancialStatements

Otherthanasdescribedbelow,nonewaccountingpronouncement
issuedoreffectiveduringthescalyearhashadorisexpectedto
haveamaterialimpactontheconsolidatednancialstatements.


OnJuly1,2007,weadoptedFASBInterpretationNo.48,“Accounting
forUncertaintyinIncomeTaxes—aninterpretationofFASBstatement
No.109”(FIN48).FIN48addressestheaccountinganddisclosureof
uncertaintaxpositions.FIN48prescribesarecognitionthresholdand
measurementattributeforthenancialstatementrecognitionand
measurementofataxpositiontakenorexpectedtobetakenina
taxreturn.Thedifferencebetweenthetaxbenetrecognizedinthe
nancialstatementsforapositioninaccordancewithFIN48and
thetaxbenetclaimedinthetaxreturnisreferredtoasanunrecognized
taxbenet.
TheadoptionofFIN48resultedinadecreasetoretainedearningsas
ofJuly1,2007,of$232,whichwasreectedasacumulativeeffect
ofachangeinaccountingprinciple,withacorrespondingincreaseto
thenetliabilityforunrecognizedtaxbenets.Theimpactprimarily
reectstheaccrualofadditionalstatutoryinterestandpenaltiesas
requiredbyFIN48,partiallyoffsetbyadjustmentstoexistingunrecog-
nizedtaxbenetstocomplywithFIN48measurementprinciples.
TheimplementationofFIN48alsoresultedinareductioninournet
taxliabilitiesforuncertaintaxpositionsrelatedtoprioracquisitions
accountedforunderpurchaseaccounting,resultinginan$80decrease
togoodwill.Additionally,theCompanyhistoricallyclassiedunrecog-
nizedtaxbenetsincurrenttaxespayable.Asaresultoftheadoption
ofFIN48,unrecognizedtaxbenetsnotexpectedtobepaidinthe
next12monthswerereclassiedtoothernoncurrentliabilitiesona
prospectivebasis.
Thetotalamountofunrecognizedtaxbenetsasoftheadoptionof
FIN48atJuly1,2007,was$2,971,excludinganyrelatedaccruals
forinterestandpenalties.Includedinthistotalwas$1,893that,if
recognized,wouldimpacttheeffectivetaxrateinfutureperiods.We
recognizeaccruedinterestandpenaltiesrelatedtounrecognizedtax
benetsinincometaxexpense.Accruedinterestandpenaltiesasof
July1,2007,were$589and$128,respectively,onanafter-taxbasis.
RefertoNote10foradditionalinformationregardinguncertaintax
positionsandrelatedactivityinthecurrentyear.




InSeptember2006,theFASBissuedStatementofFinancialAccounting
Standards(SFAS)No.158,“Employers’AccountingforDenedBenet
PensionandOtherPostretirementPlans—anamendmentofFASB
StatementsNo.87,88,106,and132(R)”(SFAS158).SFAS158
requirescompaniestorecognizetheover-fundedandunder-funded
statusofdenedbenetpensionandotherpostretirementplansas
assetsorliabilitiesontheirbalancesheets.Inaddition,changesinthe
fundedstatusmustberecognizedthroughothercomprehensive
incomeinshareholders’equityintheyearinwhichthechangesoccur.
WeadoptedSFAS158onJune30,2007.Inaccordancewiththe
transitionrulesinSFAS158,thisstandardwasadoptedonaprospec-
tivebasis.TheadoptionofSFAS158resultedinanadjustmenttoour
balancesheet,buthadnoimpactonournetearningsorcashow,
nordiditimpactanydebtcovenants.SFAS158hadnoimpactonour
measurementdate,whichcontinuestobeasofourscalyear-end.
RefertoNote9foradditionalinformationregardingourpensionand
postretirementplans.
ThefollowingtablereectstheeffectoftheadoptionofSFAS158on
ourConsolidatedBalanceSheets:
   Before  After
   Application SFAS158 Application
AsofJune30,2007  ofSFAS158 Adjustments ofSFAS158
Othernoncurrentassets  $  4,432 $(167) $  4,265
  138,181 (167) 138,014
Deferredincometaxes  12,214 (199) 12,015
Othernoncurrentliabilities  4,782 365 5,147
  71,088 166 71,254
Accumulatedother
comprehensiveincome  950 (333) 617
 67,093 (333) 66,760

  138,181 (167) 138,014



InDecember2007,theFASBissuedSFASNo.141(Revised),“Business
Combinations,”(SFAS141(R))andSFASNo.160,“Noncontrolling
InterestsinConsolidatedFinancialStatements—anamendmentof
ARBNo.51”(SFAS160).SFAS141(R)andSFAS160revisethemethod
ofaccountingforanumberofaspectsofbusinesscombinationsand
noncontrollinginterests,includingacquisitioncosts,contingencies
(includingcontingentassets,contingentliabilitiesandcontingent
purchaseprice),theimpactsofpartialandstep-acquisitions(including
thevaluationofnetassetsattributabletonon-acquiredminority
interests)andpostacquisitionexitactivitiesofacquiredbusinesses.
SFAS141(R)andSFAS160willbeeffectivefortheCompanyduringour
scalyearbeginningJuly1,2009.TheCompanybelievesthatthe
adoptionofSFAS141(R)andSFAS160willnothaveamaterialeffect
onitsnancialposition,resultsofoperationsorcashows.

InSeptember2006,theFASBissuedSFASNo.157,“FairValue
Measurements”(SFAS157).Thisstandarddenesfairvalue,establishes
aframeworkformeasuringfairvalueingenerallyacceptedaccounting
principles,andexpandsdisclosuresaboutfairvaluemeasurements.
SFAS157,asamended,iseffectivefortheCompanybeginningJuly1,
2008,forcertainnancialassetsandliabilitiesandbeginningJuly1,
2009,fornon-nancialassetsandliabilitiesrecognizedordisclosed
atfairvalueonanon-recurringbasis.TheCompanybelievesthatthe
adoptionofSFAS157willnothaveamaterialeffectonitsnancial
position,resultsofoperationsorcashows.