NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The impact of these changes on net income on a pre-tax basis is
summarized as follows for the year ended December 31:
2009
Reclassification from other comprehensive income of change in fair value of derivatives
not accounted for as hedges under United States GAAP
Decrease in fair value of prepayment option not accounted for under United States GAAP
Deferral of transaction costs under United States GAAP
Amortization of deferred transaction costs under United States GAAP
United States GAAP difference in net income (pre-tax)
2008
$
139 $
4
11
(9)
(93)
9
16
(8)
$
145 $
(76)
The impact of these changes on shareholders’ equity is summarized
as follows:
2009
2008
Deferral of transaction costs
Early repayment option
$
49 $
–
47
(4)
United States GAAP difference in ending shareholders' equity (pre-tax)
$
49 $
43
FASB ASC Subtopic 820-10 (“ASC 820-10”), Fair Value Measurements
and Disclosures (formerly FASB Statement No. 157, Fair Value
Measurements), defines fair value, establishes a framework for
measuring fair value under generally accepted accounting principles
and establishes a hierarchy that categorizes and prioritizes the
sources to be used to estimate fair value. The Company elected a
partial deferral of ASC 820-10 under the provisions of FASB ASC
Section 820-10-15, when it was adopted on January 1, 2008, related
to the measurement of fair value used when initially measuring
non-financial assets and non-financial liabilities in a business
combination, evaluating goodwill, other intangible assets, wireless
licences and other long-lived assets for impairment and valuing asset
retirement obligations and liabilities for exit or disposal activities.
The impact of fully adopting ASC 820-10, effective January 1, 2009,
was not material to the Company’s financial statements.
value is amortized to expense over the graded vesting period or,
as applicable, over the period in which the employee is eligible
to retire, whichever is shorter. For certain modified awards that
are outstanding at the reporting date, United States GAAP also
requires that cumulative compensation cost for these awards be
equal to the greater of (a) the grant-date fair value of the original
equity award and (b) the fair value of the modified liability award
until it is settled. As a result of the foregoing differences, stockbased compensation expense would be decreased by $13 million
under United States GAAP for the year ended December 31, 2009
(2008 – increased by $32 million).
Effective January 1, 2009, FASB ASC Subtopic 815-10, Derivatives
and Hedging (formerly FASB Statement No. 161, Disclosures about
Derivative Instruments and Hedging Activities), was adopted by
the Company. This statement enhances disclosures regarding an
entity’s derivative and hedging activities. The adoption of this
statement did not have an impact on the Company’s consolidated
financial statements.
(f ) Pension cost:
(e) Stock-based compensation:
All of the Company’s outstanding stock options can be settled in
cash at the discretion of the employee or director (note 19(a)(i)).
Under United States GAAP, the cost of stock-based awards that
are settled in cash, or may be settled in cash at the discretion
of the employee or director, are required to be measured at
fair value on each reporting date. Under Canadian GAAP, the
liability and compensation cost for these awards are measured
at the intrinsic value of the awards at each reporting date. In
addition, under United States GAAP, the fair value is amortized
to expense on a straight-line basis over the vesting period or, as
applicable, over the period in which the employee is eligible to
retire, whichever is shorter. Under Canadian GAAP, the intrinsic
At December 31, 2009, the recorded liability for these awards is
$13 million lower under United States GAAP than recorded under
Canadian GAAP (2008 – $8 million).
To comply with the requirements of ASC 715-20, the Company
adopted December 31, as its measurement date effective December
31, 2008, without remeasuring the plan assets and obligations at
January 1, 2008. This resulted in a decrease in retained earnings
of $4 million ($6 million less income taxes of $2 million), with a
corresponding increase of $6 million to the Company’s pension
liability. For the year ended December 31, 2009, the net periodic
pension cost under U.S. GAAP decreased by $3 million (2008 – nil)
due to the difference in measurement dates.
Under United States GAAP, the Company was required to adopt
the recognition and disclosure provisions of FASB ASC Subtopic 71520 (“ASC 715-20”), Compensation – Retirement Benefits (formerly
FASB Statement No. 158, Employers’ Accounting for Defined Benefit
Pension and Other Postretirement Plans), as at December 31, 2006.
Under ASC 715-20, the Company is required to recognize the funded
status of defined benefit postretirement plans on the balance sheet
with changes recorded in other comprehensive income (loss). For
the year ended December 31, 2009, under United States GAAP, the
Company recorded a decrease of $45 million (2008 – increase of
ROGERS COMMUNICATIONS INC. 2009 ANNUAL REPORT
125