The Prudential Series Fund

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF
THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP
For Years Ended December 31, 2008, 2007, and 2006
Note 2:
Summary of Significant Accounting Policies (continued)
Note 3: Reclassification
K. New Accounting Pronouncements - FASB Interpretation No. 46, “Consolidation of Variable Interest Entities”
(“FIN 46”), was issued in January 2003. In December 2003, FASB issued a revised interpretation of FIN 46
(“FIN 46-R”) that supersedes FIN 46. FIN 46-R defers the effective date for applying the provisions of FIN
46 for those companies currently accounting for their investments in accordance with the AICPA Audit and
Accounting Guide, “Audits of Investment Companies” (the “Audit Guide”). The FASB is currently
considering modifying FIN 46-R to provide an exception for companies that apply the Audit Guide. The
Partnership is awaiting further guidance from the FASB in order to evaluate the extent in which, if any, its
investments may need to be consolidated as a result of this FIN 46-R.
In June 2007, the Accounting Standards Executive Committee issued Statement of Position 07-1,
“Clarification of the Scope of the Audit and Accounting Guide Investment Companies and Accounting by
Parent Companies and Equity Method Investors for Investments in Investment Companies” (“SOP 07-1”).
SOP 07-1 provides guidance for determining whether an entity is within the scope of the Audit Guide. SOP
07-1 was originally determined to be effective for fiscal years beginning on or after December 15, 2007,
however, on February 6, 2008, FASB issued a Staff Position indefinitely deferring the effective date.
In December 2007, FASB issued SFAS No. 141 (revised 2007) (“SFAS 141R”), “Business Combinations”,
and SFAS No. 160, “Non-controlling interests in Consolidated Financial Statements, an Amendment to ARB
No. 51” (“SFAS 160”). SFAS 141R expands the definition of a business and redefines the acquisition date in
a merger and acquisition transaction. It significantly modifies the existing SFAS 141, including changes to
acquisition related contingent consideration, pre-acquisition contingencies, non-controlling interest,
restructuring costs, in-process R&D, goodwill and partial acquisition. SFAS 160 requires the non-controlling
interest to be reported as a separate component of equity. It also changes the allocation of losses and
accounting in step acquisitions. The provisions in SFAS 160 should be applied prospectively except for the
presentation and disclosure requirements, which are required retrospectively for all periods presented. SFAS
141R and SFAS 160 are effective for the acquisitions closing after the first annual reporting period beginning
after December 15, 2008. The Partnership is currently reviewing the provisions in SFAS 141R and SFAS
160, and no significant impact is expected from the adoption.
Certain prior period balances have been reclassified to conform with current period presentation. Such reclassifications had no
effect on previously reported net assets.
Note 4: Disclosure of Supplemental Cash Flow Information and Non-Cash Investing and Financing Activity
Cash paid for interest during the years ended December 31, 2008, 2007 and 2006, was $1,878,870, $1,746,115 and $1,806,320,
respectively.
B-11 Real Property