Part II  note 1 principal accounting policies and related financial information 41 FMC Corporation    2010 Form 10K We determined our reportable segments based on our strategic business units,  the commonalities among the products and services within each segment  and the manner in which we review and evaluate operating performance. We have identified Agricultural Products, Specialty Chemicals and Industrial  Chemicals as our reportable segments. Segment disclosures are included  in Note 19. Segment operating profit is defined as segment revenue less  segment operating expenses (segment operating expenses consist of costs of  sales and services, selling, general and administrative expenses and research  and development expenses). We have excluded the following items from  segment operating profit: corporate staff expense, interest income and  expense associated with corporate debt facilities and investments, income  taxes, gains (or losses) on divestitures of businesses, restructuring and other  charges (income), investment gains and losses, loss on extinguishment of  debt, asset impairments, LIFO inventory adjustments, amortization of  The value of the U.S. dollar and other currencies in which we operate  continually fluctuate. Results of operations and financial position  for all the years presented have been affected by such fluctuations.  We enter into certain foreign exchange contracts to mitigate the  financial risk associated with this fluctuation as discussed in Note 17.  These contracts typically qualify for hedge accounting. See “Derivative  financial instruments” below and Note 17. We record shares of common stock repurchased at cost as treasury stock,  resulting in a reduction of stockholders’ equity in the Consolidated Balance  Sheets. When the treasury shares are contributed under our employee benefit  plans, we use a first-in, first-out (“FIFO”) method for determining cost.  The difference between the cost of the shares and the market price at the  time of contribution to an employee benefit plan is added to or deducted  from capital in excess of par value of common stock. treasury stock Segment information Foreign currency translation We translate the assets and liabilities of our foreign operations at exchange  rates in effect at the balance sheet date. The foreign operations’ income  statements are translated at the monthly exchange rates for the period.  For operations where the local currency is the functional currency we  record translation gains and losses as a component of accumulated other  comprehensive income or loss in stockholders’ equity until the foreign  entity is sold or liquidated. We did not have significant operations in any  highly inflationary countries during 2010, 2009 and 2008. In countries  where the local currency is not the functional currency, except for property,  plant and equipment, and other non-current assets which are converted to  functional currencies at historical exchange rates, all gains or losses from  conversion are included in net income. Net income (loss) for 2010, 2009  and 2008 included aggregate transactional foreign currency gains and  losses. We recorded a net gain (loss) of $(15.5) million, $(7.5) million and  $0.4 million for the years ended December 31, 2010, 2009 and 2008,  respectively. Other comprehensive income or loss for 2010, 2009 and 2008  included translation gains (losses) of $(25.6) million, $17.4 million and  $(44.5) million, respectively. We record on a net basis all taxes collected from customers to be remitted  to governmental authorities in our consolidated statements of income. We provide current income taxes on income reported for financial statement  purposes adjusted for transactions that do not enter into the computation  of income taxes payable and recognize deferred tax liabilities and assets for  the expected future tax consequences of temporary differences between  the carrying amounts and the tax basis of assets and liabilities. We do not  provide income taxes on the equity in undistributed earnings of foreign  subsidiaries or affiliates when it is our intention that such earnings will  remain invested in those companies. Investment tax credits or grants,  which were immaterial to us in all years presented, are accounted for in  the period earned (the flow-through method). We formally document all relationships between hedging instruments  and hedged items, as well as the risk management objective and strategy  for undertaking various hedge transactions. This process includes relating  derivatives that are designated as fair value or cash flow hedges to specific  assets and liabilities on the balance sheet or to specific firm commitments  or forecasted transactions. We also formally assess, both at the inception  of the hedge and throughout its term, whether each derivative is highly  effective in offsetting changes in fair values or cash flows of the hedged  item. If we determine that a derivative is not highly effective as a hedge, or  if a derivative ceases to be a highly effective hedge, we discontinue hedge  accounting with respect to that derivative prospectively. We had a gain  (loss) of $0.3 million, $(0.7) million and $(0.2) million related to hedge  ineffectiveness for 2010, 2009 and 2008, respectively. income and other taxes We recognize all derivatives on the balance sheet at fair value. On the  date the derivative instrument is entered into, we generally designate the  derivative as either a hedge of the variability of cash flows to be received  or paid related to a forecasted transaction (cash flow hedge) or a hedge  of the fair value of a recognized asset or liability or of an unrecognized  firm commitment (fair value hedge). We record in accumulated other  comprehensive income or loss changes in the fair value of derivatives that  are designated as and meet all the required criteria for a cash flow hedge.  We then reclassify these amounts into earnings as the underlying hedged  item affects earnings. We record immediately in earnings changes in the  fair value of derivatives that are not designated as cash flow hedges. We record amounts billed for shipping and handling fees as revenue. Costs  incurred for shipping and handling are recorded as costs of sales and services. We recognize revenue when the earnings process is complete, which is  generally upon transfer of title. This transfer typically occurs either upon  shipment to the customer or upon receipt by the customer. In all cases,  we apply the following criteria in recognizing revenue: persuasive evidence  of an arrangement exists, delivery has occurred, the selling price is fixed or  determinable and collection is reasonably assured. Rebates due to customers  are accrued as a reduction of revenue in the same period that the related  sales are recorded based on the contract terms. We mitigate certain financial exposures, including currency risk, interest  rate risk, and energy purchase exposures, through a controlled program of  risk management that includes the use of derivative financial instruments.  We enter into foreign exchange contracts, including forward and purchased  option contracts, to reduce the effects of fluctuating foreign currency  exchange rates. Derivative financial instruments revenue recognition