Correction of Immaterial Errors

12 Months Ended

Dec. 31, 2021

Accounting Changes And Error Corrections [Abstract]

NOTE 11.

CORRECTION OF IMMATERIAL ERRORS

Beginning in the first quarter of 2019, the Company made changes to its process and presentation of freight services revenue and directly related transportation operating expenses with the objective that at each reporting level (reporting entity, segment and consolidated level) the gross revenue and associated directly related operating expenses be representative of the location where the services were performed, the operating expenses were incurred and where the revenues were earned. During the second quarter of 2021, management identified and corrected certain immaterial errors in the Company’s historical financial statements primarily related to this process that was utilized through the first quarter of 2021. The process missed an intercompany elimination of revenues and an equal and offsetting amount of directly related transportation expenses, principally impacting airfreight services in North Asia. The errors overstated revenues and directly related transportation operating expenses by equal amounts in the consolidated statements of earnings. The errors had no impact on operating income, net earnings, and earnings per share nor any other financial statement amount. Further, the errors had no impact on the balance sheets, statements of shareholders’ equity, other comprehensive income and cash flows. These errors do not affect any of the metrics used to calculate or evaluate management’s compensation and had no impact on bonuses, commissions, share-based compensation or any other employee remuneration. Historical amounts have been revised and are presented on a comparable basis.

The below table presents the effect of the correction for the following periods:

	Year ended December 31, 2020						Year ended December 31, 2019
	As reported		Adjustments		As corrected		As reported		Adjustments		As corrected
Revenues:
Airfreight services	$	4,784,402	$	510,376	$	4,274,026	$	2,929,882	$	188,944	$	2,740,938
Ocean freight and ocean services		2,353,247		10,903		2,342,344		2,217,554		29,405		2,188,149
Customs brokerage and other services		2,978,832		10,809		2,968,023		3,027,990		14,660		3,013,330
Total revenues¹		10,116,481		532,088		9,584,393		8,175,426		233,009		7,942,417
Directly related transportation operating expenses:
Airfreight services		3,679,185		510,377		3,168,808		2,143,999		188,945		1,955,054
Ocean freight and ocean services		1,762,754		10,904		1,751,850		1,613,646		29,406		1,584,240
Customs brokerage and other services		1,746,851		10,807		1,736,044		1,781,313		14,658		1,766,655
Total directly related transportation operating expenses¹	$	7,188,790	$	532,088	$	6,656,702	$	5,538,958	$	233,009	$	5,305,949

The North Asia business segment accounts for 78% and 73% of total adjustments, respectively.