In May 2011, the FASB issued authoritative guidance amending certain accounting and disclosure
requirements related to fair value measurements. The guidance clarifies (i) the requirement that the
highest and best use concept is only relevant for measuring nonfinancial assets, (ii) requirements to
measure the fair value of instruments classified in shareholders’ equity and (iii) the requirement to
disclose quantitative information about the unobservable inputs used in a fair value measurement that
is categorized within Level 3 of the fair value hierarchy. The guidance also (i) permits a reporting entity
to measure the fair value of certain financial assets and liabilities managed in a portfolio at the price
that would be received to sell a net asset position or transfer a net liability position for a particular risk,
(ii) eliminates premiums or discounts related to size as a characteristic of the reporting entity’s holding
and (iii) expands disclosures for fair value measurement. The guidance is effective for interim and
annual periods beginning after December 15, 2011. Early adoption is not permitted. We do not expect
this guidance to have a significant impact on our consolidated financial position, results of operations
or cash flows.
In June 2011, the FASB issued authoritative guidance to improve the comparability, consistency
and transparency of financial reporting and to increase the prominence of items reported in other
comprehensive income. The guidance requires entities to report components of comprehensive
income in either (i) a single continuous statement of comprehensive income or (ii) two separate but
consecutive statements. The guidance also requires entities to present on the face of the financial
statements reclassification adjustments for items that are reclassified from other comprehensive
income to net income in the statements where the components of net income and other
comprehensive income are presented. In December 2011, the FASB issued further authoritative
guidance deferring the requirements for entities to present on the face of the financial statements those
reclassification adjustments for items that are reclassified from other comprehensive income to net
income. The guidance reinstates the requirements for the presentation of reclassification adjustments
on either the face of financial statements where comprehensive income is reported or in the notes to
the financial statements. The requirements of both standards are effective for interim and annual
periods beginning after December 15, 2011, with early adoption permitted. We adopted the provisions
of the June 2011 guidance, excluding the requirements deferred in the December 2011 guidance,
effective December 31, 2011 and these provisions require that we position our statement of
comprehensive income consecutively to the income statement.
In September 2011, the FASB issued authoritative guidance permitting companies to make a
qualitative assessment of a reporting unit’s fair value prior to performing the two-step goodwill
impairment test. If it is determined through the qualitative assessment that it is not more likely than not
that the fair value of a reporting unit is less than its carrying amount, then performing the two-step
impairment test is unnecessary. The qualitative assessment is optional, allowing companies to go
directly to the quantitative assessment. The guidance is effective for interim and annual goodwill
impairment tests performed in fiscal years beginning after December 15, 2011, with early adoption
permitted. We perform our goodwill impairment test annually as of December 31. We adopted the
provisions of this standard effective December 31, 2011 and elected to continue performing our annual
goodwill impairment assessment under the quantitative two-step impairment test.
In December 2011, the FASB issued authoritative guidance requiring entities to disclose both
gross and net information about financial instruments and transactions eligible for offset in the
statement of financial position as well as financial instruments and transactions subject to agreements
similar to master netting arrangements. The additional disclosures will enable users of the financial
statements to evaluate the effect or potential effect of netting arrangements on an entity’s financial
position. The guidance is effective for interim and annual periods beginning after January 1, 2013, and
will primarily impact our disclosures associated with our commodity derivative instruments. We are
currently evaluating the impact of this guidance.
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