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Revision to Previously Reported Financial Information
 6 Months Ended
Jun. 30, 2021
Accounting Changes and Error Corrections [Abstract]  
Revision to Previously Reported Financial Information Revision to Previously Reported Financial Information
During the first quarter of 2021, we identified an accounting error involving foreign currency transactions beginning with the first quarter of 2020 though the year ended December 31, 2020. These adjustments increased retirement obligations and other liabilities by $1.5 million, retained earnings by $14.0 million and accumulated other comprehensive loss by $15.5 million as of December 31, 2020.
In the third quarter of 2020, we identified accounting errors related to the recognition of a liability for unasserted asbestos claims. The adjustments primarily relate to an IBNR associated with unasserted asbestos claims, but also include adjustments related to the associated receivables for expected insurance proceeds for asbestos settlement and defense costs from insurance coverage and the recognition as an expense the related legal fees that were previously estimated to be recoverable from insurance carriers for which coverage is not currently sufficient following the recognition of the IBNR and to correct certain other previously identified immaterial misstatements.
The following tables present the impact to the affected line items on our condensed consolidated financial statements for the periods indicated for the correction of the accounting error involving foreign currency transactions identified in the first quarter of 2021, the accounting errors related to the recognition of a liability for unasserted asbestos claims identified in the third quarter of 2020, and other immaterial misstatements previously identified:
June 30, 2020
(Amounts in thousands)As Reported AdjustmentsAs Revised
Contract assets, net of allowance for expected credit losses $309,149 $47 $309,196 
Total current assets2,430,555 47 2,430,602 
Property, plant and equipment, net of accumulated depreciation(1)541,768 5,703 547,471 
Other assets, net of allowance for expected credit losses(2)218,604 16,926 235,530 
Total assets4,755,702 22,676 4,778,378 
Accrued liabilities(3)401,041 (4,029)397,012 
Contract liabilities(4)214,135 5,498 219,633 
Debt due within one year9,058 156 9,214 
Total current liabilities1,088,738 1,625 1,090,363 
Long-term debt due after one year(1)1,367,478 5,646 1,373,124 
Retirement obligations and other liabilities(5)$470,400 $59,546 $529,946 
Retained earnings(6)3,643,868 (33,398)3,610,470 
Accumulated other comprehensive loss(643,173)(10,743)(653,916)
Total Flowserve Corporation shareholders’ equity1,662,572 (44,141)1,618,431 
Total equity1,690,351 (44,141)1,646,210 
Total liabilities and equity$4,755,702 $22,676 $4,778,378 
______________________________________
(1) Adjustment relates to right-of-use (“ROU”) asset and lease liability for an operating lease.
(2) Adjustment relates to the associated receivables for expected insurance proceeds for asbestos settlements and defense costs.
(3) Adjustment primarily relates to non-restructuring realignment charges associated with workforce reductions in our Realignment Programs ("2020 Realignment Program"). Refer to Note 17 for further discussion of this program.
(4) Adjustment relates to one of our sites for correction in contract position caused by errors in estimated costs under the over time revenue recognition model.
(5) Adjustment primarily relates to IBNR reserves associated with unasserted asbestos claims.
(6) The adjustments to retained earnings are the cumulative effect of the immaterial errors that were corrected in prior periods.
Three Months Ended June 30, 2020
(Amounts in thousands, except per share data)As ReportedAdjustmentsAs Revised
Sales$924,965 $47 $925,012 
Cost of sales(1)(657,805)2,500 (655,305)
Gross profit267,160 2,547 269,707 
Selling, general and administrative expense(2)(227,358)(1,985)(229,343)
Operating income42,888 564 43,452 
Other income (expense), net(3)(14,941)(3,966)(18,907)
Earnings before income taxes16,196 (3,437)12,759 
Provision for income taxes (5,409)924 (4,485)
Net earnings, including noncontrolling interests10,787 (2,513)8,274 
Net earnings (loss) attributable to Flowserve Corporation$8,645 $(2,513)$6,132 
Net earnings (loss) per share attributable to Flowserve Corporation common shareholders:  
Basic$0.07 $(0.02)$0.05 
Diluted0.07 (0.02)0.05 
______________________________________
(1) Adjustment primarily relates to non-restructuring realignment charges associated with workforce reductions in our 2020 Realignment Program.
(2) Adjustment primarily relates to asbestos settlement and defense costs for related legal fees.
(3) Adjustment relates to the accounting error involving foreign currency transactions.
Three Months Ended June 30, 2020
(Amounts in thousands)As ReportedAdjustmentsAs Revised
Net earnings, including noncontrolling interests(1)$10,787 $(2,513)$8,274 
Other comprehensive income (loss):
Foreign currency translation adjustments, net of taxes(2)15,084 3,964 19,048 
Other comprehensive income (loss)16,886 3,964 20,850 
Comprehensive income (loss), including noncontrolling interests27,673 1,451 29,124 
Comprehensive income (loss) attributable to Flowserve Corporation$25,594 $1,451 $27,045 
_______________________________________
(1) Adjustment relates to cumulative effect of the accounting errors that were corrected in the periods, as outlined above.
(2) Adjustment relates to the accounting error involving foreign currency transactions.
Six Months Ended June 30, 2020
(Amounts in thousands, except per share data)As ReportedAdjustmentsAs Revised
Sales$1,819,422 $(896)$1,818,526 
Cost of sales(1)(1,286,285)3,925 (1,282,360)
Gross profit533,137 3,029 536,166 
Selling, general and administrative expense(2)(470,980)(3,814)(474,794)
Operating income68,440 (785)67,655 
Interest expense(25,863)(35)(25,898)
Other income (expense), net(3)8,521 10,774 19,295 
Earnings before income taxes53,996 9,954 63,950 
Provision for income taxes (41,719)266 (41,453)
Net earnings, including noncontrolling interests12,277 10,220 22,497 
Net earnings (loss) attributable to Flowserve Corporation$8,035 $10,219 $18,254 
Net earnings (loss) per share attributable to Flowserve Corporation common shareholders: 
Basic$0.06 $0.08 $0.14 
Diluted0.06 0.08 0.14 
_______________________________________
(1) Adjustment primarily relates to non-restructuring realignment charges associated with workforce reductions in our 2020 Realignment Program.
(2) Adjustment primarily relates to asbestos settlement and defense costs for related legal fees.
(3) Adjustment relates to the accounting error involving foreign currency transactions.

Six Months Ended June 30, 2020
(Amounts in thousands)As ReportedAdjustmentsAs Revised
Net earnings, including noncontrolling interests(1)$12,277 $10,220 $22,497 
Other comprehensive income (loss):
Foreign currency translation adjustments, net of taxes(2)(66,269)(10,744)(77,013)
Other comprehensive income (loss)(58,104)(10,744)(68,848)
Comprehensive income (loss), including noncontrolling interests(45,827)(524)(46,351)
Comprehensive income (loss) attributable to Flowserve Corporation$(50,845)$(524)$(51,369)
_______________________________________
(1) Adjustment relates to cumulative effect of the accounting errors that were corrected in the periods, as outlined above.
(2) Adjustment relates to the accounting error involving foreign currency transactions.

The following tables present the impact to affected line items on our condensed consolidated financial statements for the periods indicated for the correction of the accounting error involving foreign currency transactions identified in the first quarter of 2021:
September 30, 2020
(Amounts in thousands)As Reported Adjustments(1)As Revised
Retirement obligations and other liabilities$541,721 $1,500 $543,221 
Retained earnings3,625,291 14,936 3,640,227 
Accumulated other comprehensive loss(618,856)(16,436)(635,292)
Total Flowserve Corporation shareholders’ equity1,673,421 (1,500)1,671,921 
Total equity1,703,843 (1,500)1,702,343 
_______________________________________
(1) Adjustments relate to the accounting error involving foreign currency transactions.
Three Months Ended September 30, 2020
(Amounts in thousands, except per share data)As ReportedAdjustments(1)As Revised
Other income (expense), net$(963)$5,636 $4,673 
Earnings before income taxes72,322 5,636 77,958 
Provision for income taxes (18,672)(524)(19,196)
Net earnings, including noncontrolling interests53,650 5,112 58,762 
Net earnings attributable to Flowserve Corporation$51,003 $5,112 $56,115 
Net earnings per share attributable to Flowserve Corporation common shareholders:  
Basic$0.39 $0.04 $0.43 
Diluted0.39 0.04 0.43 
_______________________________________
(1) Adjustments relate to the accounting error involving foreign currency transactions.


Three Months Ended September 30, 2020
(Amounts in thousands)As ReportedAdjustments(1)As Revised
Net earnings, including noncontrolling interests$53,650 $5,112 $58,762 
Other comprehensive income (loss):
Foreign currency translation adjustments, net of taxes25,204 (5,649)19,555 
Other comprehensive income (loss)24,269 (5,649)18,620 
Comprehensive income (loss), including noncontrolling interests77,919 (537)77,382 
Comprehensive income (loss) attributable to Flowserve Corporation$75,276 $(537)$74,739 
_______________________________________
(1) Adjustments relate to the accounting error involving foreign currency transactions.

(Amounts in thousands, except per share data)Nine Months Ended September 30, 2020
 As Reported Adjustments(1)As Revised
Other income (expense), net $7,558 $16,411 $23,969 
Earnings before income taxes125,498 16,411 141,909 
Provision for income taxes(59,175)(1,475)(60,650)
Net earnings, including noncontrolling interests66,323 14,936 81,259 
Net earnings attributable to Flowserve Corporation$59,433 $14,936 $74,369 
Net earnings per share attributable to Flowserve Corporation common shareholders: 
Basic$0.46 $0.11 $0.57 
Diluted0.45 0.12 0.57 
_______________________________________
(1) Adjustments relate to the accounting error involving foreign currency transactions.
Nine Months Ended September 30, 2020
(Amounts in thousands)As Reported Adjustments(1)As Revised
Net earnings, including noncontrolling interests$66,323 $14,936 $81,259 
Other comprehensive income (loss):
Foreign currency translation adjustments, net of taxes(41,022)(16,434)(57,456)
Other comprehensive income (loss)(33,792)(16,434)(50,226)
Comprehensive income (loss), including noncontrolling interests32,531 (1,498)31,033 
Comprehensive income (loss) attributable to Flowserve Corporation$24,869 $(1,498)$23,371 
_______________________________________
(1) Adjustments relate to the accounting error involving foreign currency transactions.
December 31, 2020
(Amounts in thousands)As Reported Adjustments(1)As Revised
Retirement obligations and other liabilities$516,087 $1,479 $517,566 
Retained earnings3,656,449 14,094 3,670,543 
Accumulated other comprehensive loss(594,052)(15,573)(609,625)
Total Flowserve Corporation shareholders’ equity1,732,470 (1,479)1,730,991 
Total equity1,762,800 (1,479)1,761,321 
_______________________________________
(1) Adjustments relate to the accounting error involving foreign currency transactions.

(Amounts in thousands, except per share data)Three Months Ended December 31, 2020
 As Reported Adjustments(1)As Revised
Other income (expense), net $(17,811)$(931)$(18,742)
Earnings before income taxes61,314 (931)60,383 
Provision for income taxes(856)89 (767)
Net earnings, including noncontrolling interests60,458 (842)59,616 
Net earnings attributable to Flowserve Corporation$56,893 $(842)$56,051 
Net earnings per share attributable to Flowserve Corporation common shareholders:  
Basic$0.44 $(0.01)$0.43 
Diluted0.43 — 0.43 
______________________________________
(1) Adjustments relate to the accounting error involving foreign currency transactions.

Three Months Ended December 31, 2020
(Amounts in thousands)As Reported Adjustments(1)As Revised
Net earnings, including noncontrolling interests$60,458 $(842)$59,616 
Other comprehensive income (loss):
Foreign currency translation adjustments, net of taxes41,411 862 42,273 
Other comprehensive income (loss)24,803 862 25,665 
Comprehensive income (loss), including noncontrolling interests85,261 20 85,281 
Comprehensive income (loss) attributable to Flowserve Corporation$81,698 $20 $81,718 
______________________________________
(1) Adjustments relate to the accounting error involving foreign currency transactions.
(Amounts in thousands, except per share data)Year Ended December 31, 2020
 As Reported Adjustments(1)As Revised
Other income (expense), net $(10,254)$15,480 $5,226 
Earnings before income taxes186,812 15,480 202,292 
Provision for income taxes(60,031)(1,386)(61,417)
Net earnings, including noncontrolling interests126,781 14,094 140,875 
Net earnings attributable to Flowserve Corporation$116,326 $14,094 $130,420 
Net earnings per share attributable to Flowserve Corporation common shareholders:  
Basic$0.89 $0.11 $1.00 
Diluted0.89 0.11 1.00 
______________________________________
(1) Adjustments relate to the accounting error involving foreign currency transactions.

Year Ended December 31, 2020
(Amounts in thousands)As Reported Adjustments(1)As Revised
Net earnings, including noncontrolling interests$126,781 $14,094 $140,875 
Other comprehensive income (loss):
Foreign currency translation adjustments, net of taxes388 (15,571)(15,183)
Other comprehensive income (loss)(8,991)(15,571)(24,562)
Comprehensive income (loss), including noncontrolling interests117,790 (1,477)116,313 
Comprehensive income (loss) attributable to Flowserve Corporation$106,565 $(1,477)$105,088 
______________________________________
(1) Adjustments relate to the accounting error involving foreign currency transactions.

The condensed consolidated statements of shareholders' equity for the three and six months ended June 30, 2020 have been revised to reflect the impacts of the above described errors. Additionally, the condensed consolidated statements of shareholders' equity for the periods from July 1, 2020 to September 30, 2020, January 1, 2020 to September 30, 2020 and for the year ended December 31, 2020, which will be revised the next time such financial statements are filed, have been corrected to reflect the impact of the errors described above and there are no other adjustments impacting those statements.

The following tables present the impact to affected sub-totals for the correction of the errors on our condensed consolidated statement of cash flows for the six month and nine month periods ended June 30, 2020 and September 30, 2020, respectively. There was no impact on the condensed consolidated statement of cash flows for the year ended December 31, 2020.
Six Months Ended June 30, 2020
(Amounts in thousands)As Reported AdjustmentsAs Revised
Net cash flows provided (used) by operating activities (1)$21,231 $(1,048)$20,183 
Net cash flows provided (used) by investing activities (2)(21,161)2,899 (18,262)
Net cash flows provided (used) by financing activities(3)(91,881)(1,851)(93,732)
Cash and cash equivalents at end of period 561,705 — 561,705 
______________________________________
(1) Adjustment relates to cumulative effect of the accounting errors that were corrected in the periods, as outlined above.
(2) Primarily related to adjustments resulting from the misclassification of Software as a service arrangements as property, plant and equipment rather than other assets, net, as prescribed by ASU 2018-15.
(3) Primarily resulting from the misclassification of non-cash items under proceeds and payments under other financing arrangements in financing activities, rather than other assets, net, in operating activities.
Nine Months Ended September 30, 2020
(Amounts in thousands)As Reported AdjustmentsAs Revised
Net cash flows provided (used) by operating activities (1)$115,629 $(1,380)$114,249 
Net cash flows provided (used) by investing activities (1)(34,160)1,495 (32,665)
Net cash flows provided (used) by financing activities178,972 (115)178,857 
Cash and cash equivalents at end of period 921,178 — 921,178 
_______________________________________
(1) Primarily related to adjustments resulting from the misclassification of Software as a service arrangements as property, plant and equipment rather than other assets, net, as prescribed by ASU 2018-15.
The impacts of the revisions have been reflected throughout the financial statements, including the applicable footnotes, as appropriate.