Black & Decker 2014 Annual Report Download - page 77

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effective for reporting periods beginning after December 15, 2014 with early adoption permitted, but only for disposals (or
classifications as held for sale) that have not been reported in financial statements previously issued or available for issue.
In July 2013, the FASB issued ASU 2013-11, "Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a
Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists." This ASU provides that a liability
related to an unrecognized tax benefit would be offset against a deferred tax asset for a net operating loss carryforward, a
similar tax loss or a tax credit carryforward if such settlement is required or expected in the event the uncertain tax position is
disallowed. The FASB's objective in issuing this ASU is to eliminate diversity in practice resulting from a lack of guidance on
this topic in current U.S. GAAP. New recurring disclosures are not required because the ASU does not affect the recognition or
measurement of uncertain tax positions under ASC 740. This ASU was effective for reporting periods beginning after
December 15, 2013 with early adoption permitted. The Company adopted this guidance during the first quarter of 2014. The
adoption of this guidance did not have a material impact to the Company's consolidated financial statements.
In March 2013, the FASB issued ASU 2013-05, “Foreign Currency Matters (Topic 830): Parent’s Accounting for the
Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or
of an Investment in a Foreign Entity.” This guidance applies to the release of the cumulative translation adjustment into net
income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial
interest in a subsidiary or group of assets that is a business within a foreign entity. This standard update was effective
prospectively for fiscal years (and interim reporting periods within those years) beginning after December 15, 2013. The
adoption of this guidance did not have an impact to the Company's consolidated financial statements.
In February 2013, the FASB issued ASU 2013-02, "Reporting of Amounts Reclassified Out of Accumulated Other
Comprehensive Income." This standard requires additional disclosures regarding the reporting of reclassifications out of
accumulated other comprehensive income (AOCI). This standard update was effective for reporting periods beginning after
December 15, 2012. The Company adopted this guidance during the first quarter of 2013.
B. ACCOUNTS AND NOTES RECEIVABLE
(Millions of Dollars) 2014 2013
Trade accounts receivable............................................................................................ $ 1,204.6 $ 1,365.6
Trade notes receivable ................................................................................................. 136.4 141.5
Other accounts receivable............................................................................................ 116.4 135.8
Gross accounts and notes receivable............................................................................ 1,457.4 1,642.9
Allowance for doubtful accounts................................................................................. (60.7)(64.4)
Accounts and notes receivable, net.............................................................................. $ 1,396.7 $ 1,578.5
Long-term trade notes receivable, net.......................................................................... $ 169.5 $ 156.3
Trade receivables are dispersed among a large number of retailers, distributors and industrial accounts in many countries.
Adequate reserves have been established to cover anticipated credit losses. Long-term trade financing receivables of $169.5
million and $156.3 million at January 3, 2015 and December 28, 2013, respectively, are reported within Other Assets in the
Consolidated Balance Sheets. Financing receivables and long-term financing receivables are predominantly related to certain
security equipment leases with commercial businesses. Generally, the Company retains legal title to any equipment leases and
bears the right to repossess such equipment in an event of default. All financing receivables are interest bearing and the
Company has not classified any financing receivables as held-for-sale. Interest income earned from financing receivables that
are not delinquent is recorded on the effective interest method. The Company considers any financing receivable that has not
been collected within 90 days of original billing date as past-due or delinquent. Additionally, the Company considers the credit
quality of all past-due or delinquent financing receivables as nonperforming.
The Company extended the terms of its accounts receivable sale program to January 8, 2016. According to the terms of that
program the Company is required to sell certain of its trade accounts receivables at fair value to a wholly owned, consolidated,
bankruptcy-remote special purpose subsidiary (“BRS”). The BRS, in turn, must sell such receivables to a third-party financial
institution (“Purchaser”) for cash and a deferred purchase price receivable. The Purchaser’s maximum cash investment in the
receivables at any time is $100.0 million. The purpose of the program is to provide liquidity to the Company. The Company
accounts for these transfers as sales under ASC 860 “Transfers and Servicing”. Receivables are derecognized from the
Company’s Consolidated Balance Sheets when the BRS sells those receivables to the Purchaser. The Company has no retained
interests in the transferred receivables, other than collection and administrative responsibilities and its right to the deferred
purchase price receivable. At January 3, 2015, the Company did not record a servicing asset or liability related to its retained