3M 2015 Annual Report Download - page 62

TableofContents
amended,iseffectiveJanuary1,2018.TheCompanyiscurrentlyassessingthisstandard’simpacton3M’sconsolidatedresultsof
operationsandfinancialcondition.
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InFebruary2015,theFASBissuedASUNo.2015-02,AmendmentstotheConsolidationAnalysis,whichchangesguidancerelated
toboththevariableinterestentity(VIE)andvotinginterestentity(VOE)consolidationmodels.WithrespecttotheVIEmodel,the
standardchanges,amongotherthings,theidentificationofvariableinterestsassociatedwithfeespaidtoadecisionmakerorservice
provider,theVIEcharacteristicsforalimitedpartnerorsimilarentity,andtheprimarybeneficiarydetermination.Withrespecttothe
VOEmodel,theASUeliminatesthepresumptionthatageneralpartnercontrolsalimitedpartnershiporsimilarentityunlessthe
presumptioncanotherwisebeovercome.Underthenewguidance,ageneralpartnerwouldlargelynotconsolidateapartnershipor
similarentityundertheVOEmodel.For3M,thisASUiseffectiveJanuary1,2016,withearlyadoptionpermitted.3Mdoesnothave
significantinvolvementwithentitiessubjecttoconsolidationconsiderationsimpactedbytheVIEmodelchangesorwithlimited
partnershipspotentiallyimpactedbytheVOEmodelchanges.Asaresult,3MdoesnotexpectthisASUtohaveamaterialimpacton
theCompany’sconsolidatedresultsofoperationsandfinancialcondition.
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InApril2015,theFASBissuedASUNo.2015-03,SimplifyingthePresentationofDebtIssuanceCosts,andinAugust2015issued
ASUNo.2015-15,PresentationandSubsequentMeasurementofDebtIssuanceCostsAssociatedwithLine-of-CreditArrangements
.UnderASU2015-03,debtissuancecostsreportedontheconsolidatedbalancesheetwouldbereflectedasadirectdeductionfrom
therelateddebtliabilityratherthanasanasset.WhileASU2015-03addressescostsrelatedtotermdebt,ASUNo.2015-15provides
clarificationregardingcoststosecurerevolvinglinesofcredit,whichare,attheoutset,notassociatedwithanoutstanding
borrowing.ASUNo.2015-15providescommentarythattheSECstaffwouldnotobjecttoanentitydeferringandpresentingcosts
associatedwithline-of-creditarrangementsasanassetandsubsequentlyamortizingthemratablyoverthetermoftherevolvingdebt
arrangement.For3M,ASUNo.2015-03iseffectiveJanuary1,2016,withearlyadoptionpermitted.TheCompanyadoptedthis
ASUinthefourthquarterof2015withretrospectiveapplicationtopriorperiods.Asaresult,debtissuecostsaggregating$26
millionpreviouslyincludedwithinOtherAssetshavebeenreflectedasreductionsinthebalancesofLong-TermDebtasof
December31,2014.
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InApril2015,theFASBissuedASUNo.2015-05,Customer’sAccountingforFeesPaidinaCloudArrangement,whichrequiresa
customertodeterminewhetheracloudcomputingarrangementcontainsasoftwarelicense.Ifthearrangementcontainsasoftware
license,thecustomerwouldaccountforfeesrelatedtothesoftwarelicenseelementinamannerconsistentwithaccountingforthe
acquisitionofotheracquiredsoftwarelicenses.Ifthearrangementdoesnotcontainasoftwarelicense,thecustomerwouldaccount
forthearrangementasaservicecontract.Anarrangementwouldcontainasoftwarelicenseelementifboth(1)thecustomerhasthe
contractualrighttotakepossessionofthesoftwareatanytimeduringthehostingperiodwithoutsignificantpenaltyand(2)itis
feasibleforthecustomertoeitherrunthesoftwareonitsownhardwareorcontractwithanotherpartyunrelatedtothevendortohost
thesoftware.For3M,thisASUiseffectiveJanuary1,2016,withearlyadoptionpermitted.Thestandardprovidesforadoptioneither
fullyretrospectivelyorprospectivelytoarrangementsenteredinto,ormateriallymodified,aftertheeffectivedate.TheCompany
doesnotexpectthisASUtohaveamaterialimpacton3M’sconsolidatedresultsofoperationsandfinancialcondition.
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InMay2015,theFASBissuedASUNo.2015-07,DisclosuresforInvestmentsinCertainEntitiesThatCalculateNetAssetValue
perShare(orItsEquivalent).Thisstandardmodifiesexistingdisclosurerequirementssuchthatinvestmentsforwhichthepractical
expedientisusedtomeasuretheirfairvalueatnetassetvalue(NAV)wouldberemovedfromthefairvaluehierarchydisclosures.
Instead,anentitywouldberequiredtoincludethoseinvestmentsasareconcilingitemsuchthatthetotalfairvalueamountof
investmentsinthefairvaluehierarchydisclosureisconsistentwiththeamountonthebalancesheet.Changeswerealsomadetothe
requirementsinasponsor’semployeebenefitplanassetdisclosures.For3M,thisstandardiseffectiveJanuary1,2016,withearly
adoptionpermitted.TheCompanyadoptedthisASUinthefourthquarterof2015withretrospectiveapplicationtopriorperiods.As
aresult,Note11,PensionandPostretirementBenefitPlans,reflectsthemodifieddisclosureswithrespecttoapplicableplanassets.
AsthisASUonlyrelatestocertaindisclosures,itdidnotimpacttheCompany’sconsolidatedresultsofoperationsandfinancial
condition.
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InJuly2015,theFASBissuedASUNo.2015-11,SimplifyingtheMeasurementofInventory,whichmodifiesexistingrequirements
regardingmeasuringinventoryatthelowerofcostormarket.Underexistingstandards,themarketamountrequiresconsiderationof
replacementcost,netrealizablevalue(NRV),andNRVlessanapproximatelynormalprofit
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