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Notes to the Financial Statements<br />
NOTE 22. INCOME TAXES (Continued)<br />
Other<br />
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows for the years listed<br />
(in millions):<br />
Balance at January 1<br />
Increase – tax positions in prior periods<br />
Increase – tax positions in current period<br />
Decrease – tax positions in prior periods<br />
Settlements<br />
Lapse of statute of limitations<br />
Foreign currency translation adjustment<br />
Balance at December 31<br />
2011<br />
$ 1,063<br />
1,045<br />
59<br />
(134)<br />
(186)<br />
(21)<br />
(8)<br />
$ 1,818<br />
2010<br />
$ 1,173<br />
138<br />
52<br />
(141)<br />
(109)<br />
(29)<br />
(21)<br />
$ 1,063<br />
The amount of unrecognized tax benefits at December 31, 2011 and 2010 that would affect the effective tax rate if<br />
recognized was $1.2 billion and $510 million, respectively.<br />
Examinations by tax authorities have been completed through 2005 in Germany, and through 2007 in Canada, the<br />
United States, and the United Kingdom. Although examinations have been completed in these jurisdictions, various<br />
unresolved transfer pricing disputes exist for years dating back to 1994.<br />
We recorded in our consolidated statement of operations approximately $77 million, $45 million, and $54 million in<br />
tax-related interest income for the years ended December 31, 2011, 2010, and 2009. As of December 31, 2011 and 2010,<br />
we had recorded a net payable of $171 million and $77 million, respectively, for tax-related interest.<br />
NOTE 23. HELD-<strong>FOR</strong>-SALE OPERATIONS, DISPOSITIONS, AND ACQUISITIONS<br />
We classify assets and liabilities as held for sale ("disposal group") when management, having the authority to<br />
approve the action, commits to a plan to sell the disposal group, the sale is probable within one year, and the disposal<br />
group is available for immediate sale in its present condition. We also consider whether an active program to locate a<br />
buyer has been initiated, whether the disposal group is marketed actively for sale at a price that is reasonable in relation<br />
to its current fair value, and whether actions required to complete the plan indicate that it is unlikely that significant<br />
changes to the plan will be made or that the plan will be withdrawn. We classify a disposal group as a discontinued<br />
operation when the criteria to be classified as held for sale have been met and we will not have any significant<br />
involvement with the disposal group after the sale.<br />
When we classify a disposal group as held for sale, we test for impairment. An impairment charge is recognized when<br />
the carrying value of the disposal group exceeds the estimated fair value, less transaction costs.<br />
We aggregate the assets and liabilities of all held-for-sale disposal groups on the balance sheet for the period in<br />
which the disposal group is held for sale. To provide comparative balance sheets, we also aggregate the assets and<br />
liabilities for significant held-for-sale disposal groups on the prior-period balance sheet.<br />
Automotive Sector<br />
Held-for-Sale Operations<br />
Ford Russia. In the second quarter of 2011, we signed an agreement with Sollers OJSC ("Sollers") establishing a<br />
50/50 joint venture in Russia, FordSollers, and classified the assets and liabilities of our operations in Russia as held for<br />
sale and suspended depreciation and amortization on those assets. A joint application by Ford and Sollers to the Russian<br />
government for participation in the new industrial assembly regime, which will qualify the joint venture for reduced import<br />
duties for parts imported into Russia, was approved by the Ministry of Economic Development and Trade on June 1, 2011.<br />
160 Ford Motor Company | 2011 Annual Report