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Table of Contents
CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
Recent Accounting Pronouncements
The following accounting pronouncements were adopted during the year ended December 31, 2012:
In May 2011, the Financial Accounting Standards Board, which we refer to as the FASB, issued new accounting guidance amending fair value
measurement to achieve common fair value measurement and disclosure requirements in U.S. GAAP and International Financial Reporting Standards.
We adopted the new accounting guidance on January 1, 2012. As the new accounting guidance primarily amended the disclosure requirements related
to fair value measurement, the adoption did not have any impact on our financial condition or results of operations.
In June 2011, the FASB issued new accounting guidance on the presentation of other comprehensive income, which was subsequently revised
in December 2011. The new guidance eliminates the current option to present the components of other comprehensive income as part of the statement
of changes in stockholders' equity. Instead, an entity has the option to present the total of comprehensive income, the components of net income and
the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive
statements. We adopted the new accounting guidance on January 1, 2012 which resulted in reporting the components of comprehensive loss in the
consolidated statements of comprehensive loss, rather than in the consolidated statements of stockholders' equity, as previously reported, including
retrospective presentation for all periods presented.
In July 2012, the FASB issued new accounting guidance amending impairment testing for indefinite
- lived intangible assets. The objective of
these amendments is to reduce the cost and complexity of performing impairment tests for indefinite - lived intangible assets by simplifying how an
entity tests those assets for impairment and to improve consistency in impairment testing guidance among long
- lived asset categories. The
amendments permit an entity first to assess qualitative factors to determine whether it is more likely than not that an indefinite
- lived intangible asset is
impaired as a basis for determining whether it is necessary to perform the quantitative impairment test. The new accounting guidance is effective for
annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. We elected early adoption of the new accounting
guidance as permitted and it had no impact on our financial condition or results of operations.
The following accounting pronouncements were issued by the FASB during the year ended December 31, 2012:
In October 2012, the FASB issued accounting guidance containing technical corrections and improvements to the Accounting Standards
Codification, which we refer to as the Codification. The technical corrections are relatively minor corrections and clarifications. These corrections,
which affect various Codification topics and apply to all reporting entities within the scope of those topics, are divided into three main categories: (1)
Source literature amendments which carry forward the original intent of certain pre
- Codification authoritative literature that was inadvertently altered
during the Codification process; (2) Guidance clarification and reference corrections which resulted in changes to wording and references to avoid
misapplication or misinterpretation of guidance; and (3) Relocated guidance which moved guidance from one part of the Codification to another to
correct instances in which the scope of pre
- Codification guidance may have been unintentionally narrowed or broadened during the Codification
process. The guidance also made conforming changes for the use of the term "fair value" in certain pre - Codification standards. The FASB did not
provide transition guidance for Codification amendments that are not expected to change current practice. However, it did for those amendments that
are more substantive and these will be effective for fiscal periods beginning after December 15, 2012. We are still evaluating the impact these technical
corrections will have, if any, on our financial condition or results of operations.
In connection with our cost savings initiatives, since the beginning of 2011, a total of approximately 5,800 unutilized tower leases have either
been terminated or when early termination was not available under the terms of the lease, we advised our landlords of our intention not to renew. In
connection with this lease termination initiative, we incurred lease termination costs and recognized a cease
- to - use tower lease liability based on the
remaining lease rentals (including contractual rent escalations) for leases subject to termination actions, reduced by estimated sublease rentals, if any.
The charge for lease termination activities is net of previously recorded deferred rent liabilities associated with these leases and includes cancellation
fees. In addition, where our current contract requires us to continue payments for certain executory costs for the remaining terms of these leases, we
have accrued a liability for such costs. See Note 5, Property, Plant and Equipment for a description of the write down of costs for projects classified as
construction in progress related to the above leases.
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3.
Charges Resulting from Cost Savings Initiatives