Proctor and Gamble 2010 Annual Report Download - page 59

Notes to Consolidated Financial Statements The Procter & Gamble Company 57
Amounts in millions of dollars except per share amounts or as otherwise specified.
Fair Values of Financial Instruments
Certain financial instruments are required to be recorded at fair value.
Changes in assumptions or estimation methods could affect the fair
value estimates; however, we do not believe any such changes would
have a material impact on our financial condition, results of opera-
tions or cash flows. Other financial instruments, including cash equiv-
alents, other investments and short-term debt, are recorded at cost,
which approximates fair value. The fair values of long-term debt and
financial instruments are disclosed in Note 4 and Note 5, respectively.
New Accounting Pronouncements and Policies
Other than as described below, no new accounting pronouncement
issued or effective during the fiscal year has had or is expected to
have a material impact on the Consolidated Financial Statements.
FAIR VALUE MEASUREMENTS
On July1, 2008, we adopted new accounting guidance on fair value
measurements. The new guidance defines fair value, establishes a
framework for measuring fair value under U.S. GAAP and expands
disclosures about fair value measurements. It was effective for the
Company beginning July1, 2008, for certain financial assets and
liabilities and, beginning July1, 2009, for certain non-financial assets
and liabilities. Refer to Note 5 for additional information regarding
our fair value measurements for financial and non-financial assets and
liabilities.
DISCLOSURES ABOUT DERIVATIVE INSTRUMENTS
AND HEDGING ACTIVITIES
On January1, 2009, we adopted new accounting guidance on disclo-
sures about derivative instruments and hedging activities. The new
guidance impacts disclosures only and requires additional qualitative
and quantitative information on the use of derivatives and their impact
on an entity’s financial position, results of operations and cash flows.
Refer to Note 5 for additional information regarding our risk manage-
ment activities, including derivative instruments and hedging activities.
BUSINESS COMBINATIONS
On July1, 2009, we adopted new accounting guidance on business
combinations. The new guidance revised the method of accounting
for a number of aspects of business combinations including acquisition
costs, contingencies (including contingent assets, contingent liabilities
and contingent purchase price) and post-acquisition exit activities of
acquired businesses. The adoption of the new guidance did not have
a material effect on our financial position, results of operations or
cash flows.
NONCONTROLLING INTERESTS IN
CONSOLIDATED FINANCIAL STATEMENTS
On July1, 2009, we adopted new accounting guidance on noncontrol-
ling interests in consolidated financial statements. The new accounting
guidance requires that a noncontrolling interest in the equity of a
subsidiary be accounted for and reported as equity, provides revised
guidance on the treatment of net income and losses attributable to the
noncontrolling interest and changes in ownership interests in a subsid-
iary and requires additional disclosures that identify and distinguish
between the interests of the controlling and noncontrolling owners.
The Company’s retrospective adoption of the new guidance on
July1, 2009 did not have a material effect on our financial position,
results of operations or cash flows. Net expense for income attributable
to the noncontrolling interests totaling $110 in 2010, $86 in 2009 and
$78 in 2008 is not presented separately in the Consolidated Statements
of Earnings due to immateriality, but is reflected within other non-
operating income/(expense), net. After deduction of the net expense
for income attributable to noncontrolling interests, net earnings repre-
sents net income attributable to the Company’s common shareholders.