Windstream 2007 Annual Report Download - page 135

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. Summary of Significant Accounting Policies and Changes, Continued:
expand the use of fair value measurements in financial statements. It emphasizes that fair value is a market-based
measurement and not an entity-specific measurement, and that it should be based on an exchange transaction in
which a company sells an asset or transfers a liability. SFAS No. 157 also establishes a fair value hierarchy in
which observable market data would be considered the highest level, while fair value measurements based on an
entity’s own assumptions would be considered the lowest level. For calendar year companies like Windstream,
SFAS No. 157 is effective beginning January 1, 2008. FASB Staff Position (“FSP”) No. 157-2 allows a one-year
deferral of implementation for non-financial assets and liabilities, except items recognized or disclosed at fair
value on an annual or more frequently recurring basis. Windstream does not expect the adoption of SFAS No. 157
in the first quarter of 2008 to have a material impact on its consolidated financial statements. However, the
Company continues to evaluate the effects that SFAS No. 157 will have on its consolidated financial statements
with regards to non-financial assets and liabilities that are recognized or disclosed at fair value on a non-recurring
basis.
SFAS No. 159 - 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 No. 159 allows the
measurement at fair value of eligible financial assets and liabilities that are not otherwise required to be measured
at fair value. If the fair value option for an eligible item is elected, unrealized gains and losses for that item shall
be reported in current earnings at each subsequent reporting date. SFAS No. 159 also establishes presentation and
disclosure requirements designed to draw comparison between the different measurement attributes the company
elects for similar types of assets and liabilities. This statement is effective for fiscal years beginning after
November 15, 2007. The Company is still evaluating the impact this statement might have on its consolidated
financial statements, but it does not anticipate the election of the fair value option for any of its eligible financial
assets and liabilities upon implementation of SFAS No. 159, and thus, does not expect SFAS No. 159 to have any
impact on its consolidated financial statements.
SFAS No. 141(R) - In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations”, a revision
of SFAS No. 141. Under SFAS No. 141(R), an acquiring entity will be required to recognize all the assets
acquired and liabilities assumed in a transaction at the acquisition-date fair value with limited exceptions. SFAS
No. 141(R) will change the accounting treatment for certain specific items, including acquisition costs, acquired
contingent liabilities, restructuring costs, deferred tax asset valuation allowances and income tax uncertainties
after the acquisition date. SFAS No. 141(R) also includes a substantial number of new disclosure requirements.
For calendar year companies like Windstream, SFAS No. 141(R) is effective for all business combinations for
which the acquisition date is on or after January 1, 2009. The Company is currently evaluating the effects that
SFAS No. 141(R) will have on its consolidated financial statements with regards to future business combinations.
SFAS No. 160 - 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 noncontrolling interest to be
recognized as equity in the consolidated financial statements, separate from the parent’s equity. In addition, net
income attributable to the noncontrolling interest will be included in consolidated net income. SFAS No. 160
clarifies that changes in a parent’s ownership interest in a subsidiary that do not result in deconsolidation are
equity transactions if the parent retains its controlling financial interest. In addition, when a subsidiary is
deconsolidated, the parent must recognize a gain or loss in net income, measured using the fair value of the
noncontrolling equity investment on the deconsolidation date. Expanded disclosures are also required regarding
the interests of the parent and its noncontrolling interest. SFAS No. 160 is effective for fiscal years, and interim
periods within those fiscal years, beginning on or after December 15, 2008. The Company does not expect SFAS
No. 160 to have any impact on its consolidated financial statements.
F-49