Windstream 2010 Annual Report Download - page 145

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. Summary of Significant Accounting Policies and Changes, Continued:
recognized or disclosed at fair value on an annual or more frequently recurring basis, on January 1, 2009. The
adoption of this guidance did not have a material impact on our consolidated financial statements.
Effective April 1, 2009, Windstream adopted authoritative guidance for determining fair value when the volume
and level of activity for an asset or liability has significantly decreased and identifying transactions that are not
orderly. This guidance provided additional direction for estimating fair value, in accordance with other
authoritative guidance related to fair value measurements, when the volume and level of activity for a financial
asset or liability has significantly decreased. This guidance also offers directives on identifying circumstances that
indicate when a transaction is not orderly. There was no impact to Windstream’s consolidated financial statements
upon adoption.
On August 28, 2009, the FASB updated the authoritative guidance for fair value measurements to clarify that in
circumstances in which a quoted price in an active market for the identical liability is not available, a reporting
entity is required to measure fair value using one or more of the following methods: 1) a valuation technique that
uses a) the quoted price of the identical liability when traded as an asset or b) quoted prices for similar liabilities
or similar liabilities when traded as assets and/or 2) a valuation technique that is consistent with fair value
measurement principles (e.g. an income approach or market approach). The amendment also clarifies that when
estimating the fair value of a liability, a reporting entity is not required to adjust to include inputs relating to the
existence of transfer restrictions on that liability. The adoption of this guidance did not impact Windstream’s
consolidated financial statements.
On September 30, 2009, the FASB updated the authoritative guidance to allow a reporting entity to measure the
fair value of certain alternative investments on the basis of net asset value per share of the investment if the net
asset value of the investment is calculated in a manner consistent with the measurement principles of investment
companies. The adoption of this guidance did not have a material impact on our consolidated financial statements.
Effective January 1, 2010, Windstream adopted revised authoritative guidance for fair value measurements. This
guidance required companies to disclose the reason for significant transfers of fair value measurements between
Levels 1 and 2 in the fair value hierarchy. In addition, it clarified and expanded disclosure requirements on the
valuation techniques and significant inputs used in Level 2 and 3 fair value measurements. The amended guidance
also requires companies to disclose changes in valuation techniques between periods, along with the reason for the
change. The Company’s fair value measurement disclosures are contained in Note 6.
Business Combinations – Effective January 1, 2009, Windstream adopted the revised authoritative guidance for
business combinations which establishes principles and requirements for how the acquirer in a business
combination recognizes all the assets acquired and liabilities assumed in a transaction at the acquisition-date fair
value with limited exceptions. The revised guidance changed 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. In addition, a substantial number of new
disclosures are also required.
In April 2009, the FASB amended the authoritative guidance for subsequent business combinations to require
contingent assets acquired or liabilities assumed be initially recognized at fair value at the acquisition date if fair
value can be determined during the measurement period. If the acquisition date fair value cannot be determined,
the asset acquired or liability assumed arising from a contingency is recognized only if certain criteria are met.
This guidance also requires that a systematic and rational basis for subsequently measuring and accounting for the
assets or liabilities be developed depending on their nature. See Note 3 for a discussion of the Company’s
application of this guidance to its acquisitions of NuVox, Inc. (“NuVox”), Iowa Telecommunications Services,
Inc. (“Iowa Telecom”), Hosted Solutions Acquisition, LLC (“Hosted Solutions”), Q-Comm Corporation
(“Q-Comm”), D&E Communications, Inc. (“D&E”) and Lexcom, Inc. (“Lexcom”).
Noncontrolling Interests in Consolidated Financial Statements – On January 1, 2009, Windstream adopted
authoritative guidance for noncontrolling interests in consolidated financial statements. Windstream does not have
any non-controlling interests, and thus the adoption of this guidance did not impact the Company’s consolidated
financial statements.
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