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New Accounting Guidance Pending Adoption
12 Months Ended
Dec. 31, 2011
New Accounting Guidance Pending Adoption [Abstract]  
New Accounting Guidance Pending Adoption

24. New Accounting Guidance Pending Adoption

 

(PPL, PPL Energy Supply, PPL Electric, LKE, LG&E and KU)

 

Fair Value Measurements

 

Effective January 1, 2012, the Registrants will prospectively adopt accounting guidance that was issued to clarify existing fair value measurement guidance as well as enhance fair value disclosures. The additional disclosures required by this guidance include quantitative information about significant unobservable inputs used for Level 3 measurements, qualitative information about the sensitivity of recurring Level 3 measurements, information about any transfers between Level 1 and 2 of the fair value hierarchy, information about when the current use of a non-financial asset is different from the highest and best use, and the hierarchy classification for assets and liabilities whose fair value is disclosed only in the notes to the financial statements.

 

Any fair value measurement differences resulting from the adoption of this guidance will be recognized in income in the period of adoption. The adoption of this guidance is not expected to have a significant impact on the Registrants.

 

Testing Goodwill for Impairment

 

Effective January 1, 2012, the Registrants will prospectively adopt accounting guidance which will allow an entity to elect the option to first make a qualitative evaluation about the likelihood of an impairment of goodwill. If, based on this assessment, the entity determines it is not more likely than not the fair value of a reporting unit is less than the carrying amount, the two-step goodwill impairment test is not necessary. However, the first step of the impairment test is required if an entity concludes it is more likely than not the fair value of a reporting unit is less than the carrying amount based on the qualitative assessment.

 

The adoption of this standard is not expected to have a significant impact on the Registrants.

 

Improving Disclosures about Offsetting Balance Sheet Items

 

Effective January 1, 2013, the Registrants will retrospectively adopt accounting guidance issued to enhance disclosures about financial instruments and derivative instruments that either (1) offset on the balance sheet or (2) are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset on the balance sheet.

 

Upon adoption, the enhanced disclosure requirements are not expected to have a significant impact on the Registrants.