## note 2 recently issued and adopted accounting pronouncements and regulatory items 

## new accounting guidance and regulatory items 

## Multiple-Deliverable revenue arrangements 

In October 2009, the Financial Accounting Standards Board (“FASB”) amended its guidance regarding the criteria for when to evaluate individual delivered items in a multiple deliverable arrangement and how to allocate consideration received. We are required to adopt this guidance starting on January 1, 2011. We are in the process of evaluating this guidance; however do not believe it will have a material effect on our consolidated financial statements upon adoption. 

## accounting guidance and regulatory items adopted in 2010 

## patient protection and affordable Care act 

On March 23, 2010, the Patient Protection and Affordable Care Act was signed into law. The new legislation makes extensive changes to the current system of health care insurance and benefits. The Reconciliation Act of 2010 makes certain changes to the law. The reconciliation bill was passed on March 25, 2010. 

A provision of the new law relates to the elimination of the deduction for the Medicare Part D subsidy. We provide qualifying prescription drug coverage to Medicare-eligible retirees and as a result we receive a nontaxable subsidy from the U.S. government. As a result of the new health care legislation, income tax deductions for the cost of providing prescription drug coverage will be reduced by the amount of any subsidy received. Under U.S. accounting literature, the effect of changes in tax laws or rates on deferred tax assets and liabilities is reflected in the period that includes the enactment date, even though the changes may not be effective until future periods. Please see Note 11 for the impact of this tax law change on our deferred tax assets. 

We believe the effect of these acts on our U.S. postretirement health care benefit plans obligation and cost are immaterial. However, we will continue to monitor and assess the effect of the Acts as the regulatory requirements are finalized. 

## note 3 acquisitions 

## 2010 acquisitions 

In June 2010, we acquired global registration rights to an herbicide, with unique weed control features, in our Agricultural Products segment. As part of this acquisition we also acquired certain rights relating to a separate herbicide compound still under development. The combined purchase price for both of the rights was approximately $7.5 million. See Note 4 and Note 7 for more information. 

## Disclosures about Credit Losses 

In July 2010, the FASB amended its guidance regarding the disclosure of an entity’s allowance for credit losses and the credit quality of its financing receivables. The amendments enhance disclosures about the credit quality of financing receivables and the allowance for credit losses by providing a greater level of disaggregated information. We adopted this guidance for our annual reporting period ended December 31, 2010. Except for additional disclosure in Note 1, there was no impact to our financial statements upon adoption. 

## Milestone Method of revenue recognition 

In March 2010, the FASB reached a consensus on the accounting treatment of revenue recognition based on the milestone method. This new guidance defines a milestone payment and clarifies whether a vendor may recognize revenue from the achievement of a milestone in its entirety in the period in which the milestone is achieved. We adopted this guidance on July 1, 2010. There was no impact to our financial statements upon adoption. 

## Variable interest entities 

In June 2009, the FASB amended its guidance regarding the consolidation of variable interest entities, by altering how a company determines when an entity, that is insufficiently capitalized or not controlled through voting, should be consolidated. A company has to determine whether it should consolidate an entity based upon the entity’s purpose and design and the parent company’s ability to direct the entity’s actions. We adopted this guidance on January 1, 2010. There was no impact to our financial statements upon adoption. 

## accounting for transfers of Financial assets 

In June 2009, the FASB amended its guidance on accounting for transfers of financial assets. This amended literature requires entities to provide more information about sales of securitized financial assets and similar transactions, particularly if the seller retains some risk to the assets. This guidance eliminates the concept of a qualifying special-purpose entity, changes the requirements for the de-recognition of financial assets, and requires sellers of the assets to make additional disclosures. We adopted this guidance on January 1, 2010. There was no impact to our financial statements upon adoption. 

Pro forma revenue, net income and earnings per share information related to this acquisition is not presented because its impact on these measures in our consolidated statements of income is not significant. 

