Recent Accounting Developments

12 Months Ended

Dec. 31, 2014

Recent Accounting Developments [Abstract]

Note 3. Recent Accounting Developments

In May 2014, the Financial Accounting Standards Board and the International Accounting Standards Board finished their joint project to converge U.S. GAAP and International Financial Reporting Standards in the area of revenue recognition. The resulting accounting standards update eliminates the transaction- and industry-specific revenue recognition guidance under current U.S. GAAP and replaces it with a principles based approach for determining revenue recognition.

The core principle in the new guidance is that a company should recognize revenue in a manner that depicts the transfer of goods or services to customers in an amount that reflects the consideration the company expects to receive for those goods or services. In order to apply this core principle, companies will apply the following five steps in determining the amount of revenues to recognize:

identify the contract;

identify the performance obligations in the contract;

determine the transaction price;

allocate the transaction price to the performance obligations in the contract; and

recognize revenue when (or as) the performance obligation is satisfied.

Each of these steps involves judgment and an analysis of the contract's terms and conditions.

We are continuing to evaluate this recently issued accounting guidance; therefore, we are currently not in a position to estimate its impact on our consolidated financial statements. The effective date of the new standard is January 1, 2017. At present, we expect to adopt the new standard using the modified retrospective method. This modified approach allows us to apply the new standard to (i) all new contracts after the effective date and (ii) all existing contracts as of the effective date through a cumulative adjustment to equity. Consolidated revenues for periods prior to the effective date would not be retrospectively adjusted.