New and Proposed Accounting Pronouncements

3 Months Ended

Mar. 31, 2015

New Accounting Pronouncements [Abstract]

New and Proposed Accounting Pronouncements

(8) New and Proposed Accounting Pronouncements

New Accounting Pronouncements

In April 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which amends the threshold for a disposal to qualify as discontinued operations and requires new disclosures for individually material disposal transactions that do not meet the definition of a discontinued operation. Under the new standard, companies report discontinued operations when they have a disposal that represents a strategic shift that has or will have a major impact on operations or financial results. This ASU will be applied prospectively and was effective for interim and annual periods after December 15, 2014. This ASU is not expected to have a material impact on our consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. This ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for us on January 1, 2017. Early adoption is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. We are evaluating the effect this ASU will have on our consolidated financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing financial reporting.

Proposed Accounting Pronouncements

In May 2013, the FASB reissued an exposure draft on lease accounting which would require entities to recognize right-of-use (ROU) assets and lease liabilities arising from lease contracts on the balance sheet. However, subsequent accounting for the ROU asset and presentation of lease expense will depend on whether the lease is classified as Type A (most capital leases under current U.S. GAAP) or Type B (most operating leases under current U.S. GAAP). We consider our leases to be primarily Type B leases which will generally have straight-line recognition of total lease expense. We have not yet determined the impact the adoption of this proposed standard will have on our consolidated financial statements. As of March 31, 2015, we lease approximately 90% of our store locations, five of our distribution and packaging facilities, two of our manufacturing facilities, and a signficant portion of our distribution fleet.