Accounting Pronouncements

9 Months Ended

Sep. 30, 2012

Accounting Pronouncements [Abstract]

Accounting Pronouncements

Note 15. Accounting Pronouncements

In October 2012, the FASB issued ASU 2012-06, Business Combinations (Topic 805), “Subsequent Accounting for an Indemnification Asset Recognized at the Acquisition Date as a Result of a Government-Assisted Acquisition of a Financial Institution”. The ASU specifies that when a reporting entity recognizes an indemnification asset as a result of a government-assisted acquisition of a financial institution and subsequently a change in the cash flows expected to be collected on the indemnification asset occurs, the reporting entity should subsequently account for the change in the measurement of the indemnification asset on the same basis as the change in the assets subject to indemnification. Any amortization of changes in value should be limited to the contractual term of the indemnification agreement. This ASU becomes effective for fiscal years and interim periods within those years beginning on or after December 15, 2012. As the company does not have an indemnification asset, this ASU will have no effect on the company’s consolidated financial position or consolidated results of operations as a result of adoption. 

In July 2012, the FASB issued ASU 2012-02, Intangibles-Goodwill and Other (Topic 350), “Testing Indefinite-Lived Intangible Assets for Impairment”. The amendments in this Update are intended to reduce cost and complexity by providing an entity with the option to make a qualitative assessment about the likelihood that an indefinite-lived intangible asset is impaired to determine whether it should perform a quantitative impairment test. This ASU becomes effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. The company does not anticipate any effect on its consolidated financial position or consolidated results of operations as a result of adoption for the fiscal year ending December 31, 2013.

In September 2011, the FASB issued ASU 2011-08, Intangibles – Goodwill and Other (Topic 350), “Testing Goodwill for Impairment”. This ASU allows companies to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The “more likely than not” threshold is defined as having a likelihood of more than 50 percent. A company is not required to calculate the fair value of a reporting unit unless it determines that it is more likely than not that its fair value is less than its carrying amount. The objective of the ASU is to simplify the goodwill impairment testing process in terms of both cost and complexity. The ASUbecame effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Management is in the process of assessing the effect of this ASU on the company and does not anticipate the adoption of this standard will have an effect on its financial statements.

In June 2011, the FASB issued ASU 2011-05, Comprehensive Income (Topic 220) “Presentation of Comprehensive Income”. This ASU requires companies 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. The ASU does not change the items that must be reported in other comprehensive income, when an item of other comprehensive income must be reclassified to net income, the option for an entity to present components of other comprehensive income net or before related tax effects, or how earnings per share is calculated or presented. This ASUwas effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The adoption of this standard did not have a significant impact on the company’s financial statements.