New Accounting Pronouncements

3 Months Ended

Mar. 31, 2012

New Accounting Pronouncements — In April 2011, The Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-03, Reconsideration of Effective Control for Repurchase Agreements. ASU 2011-03 affects all entities that enter into agreements to transfer financial assets that both entitle and obligate the transferor to repurchase or redeem the financial assets before their maturity by removing from the assessment of effective control the criterion relating to the transferor’s ability to repurchase or redeem the financial assets on substantially the agreed terms, even in the event of default by the transferee. ASU 2011-03 also eliminates the requirement to demonstrate that the transferor possesses adequate collateral to fund substantially all the cost of purchasing replacement financial assets. The guidance is effective prospectively for new transactions of modifications of existing transactions as of the first interim or annual period beginning on or after December 15, 2011. ASU 2011-03 became effective for the Company on January 1, 2012 and its implementation had no effect on the Company’s consolidated financial position, results of operations or cash flows.

In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. The standards set forth in ASU 2011-04 supersede most of the accounting guidance formerly set forth in preceding GAAP. The amendments improve comparability of fair value measurements presented and disclosed in statements prepared in accordance with GAAP and those prepared in accordance with IFRSs and clarify the application of existing fair value measurement requirements. The clarification amendments include (1) that the application of the highest and best use and valuation premise concepts are relevant only with respect to fair value measurements of nonfinancial assets, (2) specifies that the fair value measurement of a financial instrument included in an entity’s shareholders’ equity should be from the perspective of a market participant that holds that instrument as an asset and (3) requirements that entities disclose quantitative information about the unobservable inputs used in a fair value measurement categorized within Level 3 of the fair value hierarchy. The ASU became effective for the Company on January 1, 2012 and did not have a material impact on the Company’s consolidated financial positions, results of operations or cash flows.

In June 2011, the FASB issued ASU No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income. ASU 2011-05 amends prior GAAP to require that, in fiscal years and interim reporting periods beginning after December 15, 2011, an entity present all nonowner changes in stockholders’ equity either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In the two-statement approach, the first statement should present total net income and its components followed consecutively by a second statement that should present total other comprehensive income, the components of other comprehensive income, and the total of comprehensive income. This new guidance has been implemented in this report. In January 2012, the FASB issued additional guidance that indefinitely defers the effective date of requirements to present reclassification adjustments by component in both the statement where net income is presented and that statement where other comprehensive income is presented.

In December, 2011, The FASB issued ASU 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities. The amendments in the Update affect all entities that have financial instruments and derivative instruments that are either (1) offset in accordance with either Accounting Standards Codification (“ASC”) Section 210-20-45 or ASC Section 815-10-45 or (2) subject to an enforceable master netting arrangement or similar agreement. The ASU amends the disclosure requirements on offsetting in SASC Section 210-20-50. The new disclosure requirements are intended to enable users of an entity’s financial statements to evaluate the effect or potential effect of netting arrangements on an entity’s financial position, including the effect or potential effect of rights of setoff associated with certain financial instruments or derivative instruments within the Update’s scope. The amendments are required to be applied for interim and annual reporting periods beginning on or after January 1, 2103 and the disclosures are required to be applied retrospectively for all comparative periods presented. The Company is evaluating the impact that adoption will have on its consolidated statements, if any.

- Definition

The entire disclosure for reporting accounting changes and error corrections. It includes the conveyance of information necessary for a user of the Company's financial information to understand all aspects and required disclosure information concerning all changes and error corrections reported in the Company's financial statements for the period.

+ References+ Details

COMMUNITY FIRST BANCORP 10-Q