XML 21 R10.htm IDEA: XBRL DOCUMENT v3.19.1
Recently Adopted Accounting Standards
 6 Months Ended
Feb. 28, 2019
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]  
Recently Adopted Accounting Standards
Recently Adopted Accounting Standards

In October 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-16 – Intra-Entity Transfers Other Than Inventory ("ASU 2016-16"), which requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. We adopted this ASU in the first quarter of 2019 under the modified retrospective method and, in connection therewith, made certain adjustments as noted in the table below.

In January 2016, the FASB issued ASU 2016-01 – Recognition and Measurement of Financial Assets and Financial Liabilities, which provides guidance for the recognition, measurement, presentation, and disclosure of financial assets and liabilities. We adopted this ASU in the first quarter of 2019 under the modified retrospective method, with prospective adoption for amendments related to equity securities without readily determinable fair values. The adoption of this ASU did not have a material impact on our financial statements.

In May 2014, the FASB issued ASU 2014-09 – Revenue from Contracts with Customers (as amended, "ASC 606"), which supersedes nearly all existing revenue recognition guidance under generally accepted accounting principles in the United States. The core principal of ASC 606 is that an entity should recognize revenue when it transfers control of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASC 606 also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. We adopted ASC 606 in the first quarter of 2019 under the modified retrospective method and, in connection therewith, made certain adjustments as noted in the table below. We applied ASC 606 to contracts with customers that had not yet been completed as of the adoption date.

The following table summarizes the effects of adopting ASU 2016-16 and ASC 606.
 
 
 
 
 
 
 
 
 
Ending Balance
as of
August 30, 2018
 
ASU 2016-16
 
ASC 606
 
Opening Balance
as of
August 31, 2018
Receivables
$
5,478

 
$
—

 
$
114

 
$
5,592

Inventories
3,595

 
—

 
(5
)
 
3,590

Other current assets
164

 
(14
)
 
30

 
180

Deferred tax assets
1,022

 
56

 
(92
)
 
986

Other current liabilities
521

 
—

 
(4
)
 
517

Other noncurrent liabilities
581

 
—

 
1

 
582

Retained earnings
24,395

 
42

 
50

 
24,487


As a result of the adoption of ASC 606, the opening balances as of August 31, 2018 for receivables, other current assets, and other current liabilities increased due to the reclassification of allowances for rebates, pricing adjustments, and returns to conform to the new presentation requirements. In addition, the margin from previously deferred sales to distributors was reclassified from other current liabilities to retained earnings. The tax effects of the adoption of ASC 606 were recorded primarily as a reduction of net deferred tax assets, substantially as a result of recognizing income for accounting purposes earlier under ASC 606 than for tax purposes in various jurisdictions.

The effects of ASC 606 to our consolidated statement of operations and balance sheet were as follows:
 
Quarter ended February 28, 2019
 
Six months ended February 28, 2019
 
As Reported
 
Adjustments
 
Amounts Without the Effects of Adoption of ASC 606
 
As Reported
 
Adjustments
 
Amounts Without the Effects of Adoption of ASC 606
Revenue
$
5,835

 
$
(20
)
 
$
5,815

 
$
13,748

 
$
(115
)
 
$
13,633

Cost of goods sold
2,971

 
(28
)
 
2,943

 
6,269

 
(69
)
 
6,200

Interest expense
(27
)
 
1

 
(26
)
 
(60
)
 
3

 
(57
)
Income tax provision
(280
)
 
(8
)
 
(288
)
 
(757
)
 
(5
)
 
(762
)
Net income attributable to Micron
1,619

 
1

 
1,620

 
4,912

 
(48
)
 
4,864


As of February 28, 2019
 
As Reported
 
Adjustments
 
Amounts Without the Effects of Adoption of ASC 606
Receivables
 
$
4,416

 
$
(154
)
 
$
4,262

Other current assets
 
211

 
(39
)
 
172

Deferred tax assets
 
762

 
87

 
849

Accounts payable and accrued expenses
 
4,062

 
—

 
4,062

Other current liabilities
 
665

 
(7
)
 
658

Other noncurrent liabilities
 
993

 
(1
)
 
992

Retained earnings
 
29,364

 
(98
)
 
29,266