CDW 2014 Annual Report Download - page 77

Table of Contents CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Company accounts for unrecognized tax benefits based upon its assessment of whether a tax benefit is more likely than not to be
sustained upon examination by tax authorities. The Company reports a liability for unrecognized tax benefits resulting from
unrecognized tax benefits taken or expected to be taken in a tax return and recognizes interest and penalties, if any, related to its
unrecognized tax benefits in income tax expense.
Stock Compensation - Performance Share Awards
In June 2014, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2014-12,
“Compensation - Stock Compensation,” which amended the standard on how to account for share-
based payments when the terms of an
award provide that a performance target could be achieved after the requisite service period. Under this ASU, a performance target that
could be achieved after the requisite service period is required to be treated as a performance condition that affects the vesting of the
award and should not be reflected in estimating the fair value of the award at the grant date. This ASU is effective for the first quarter of
2016 with early adoption permitted. The Company already accounts for performance shares utilizing the method outlined by this ASU
and is not impacted by the new standard.
Revenue Recognition
In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers," which outlines a single comprehensive
model for entities to use in accounting for revenue arising from contracts with customers and supersedes the most current revenue
recognition standard. This ASU is effective for the Company for the first quarter of 2017 and early adoption is not permitted. This ASU
allows for either a full retrospective adoption approach or a modified retrospective adoption approach. The Company is currently
evaluating the impact that this ASU will have on its consolidated financial position, results of operations and cash flows.
Property and equipment consisted of the following:
During 2014, 2013 and 2012, the Company recorded disposals of $32.0 million , $7.9 million and $12.2 million , respectively, to
remove assets that were no longer in use from property and equipment. The Company recorded a pre-tax loss of $0.1 million , $0.0
million and $0.1 million in 2014, 2013 and 2012, respectively, for certain disposed assets that were not fully depreciated.
Depreciation expense for the years ended December 31, 2014, 2013 and 2012 was $25.8 million , $27.2 million and $32.0 million ,
respectively.
As described in Note 1, the Company is required to perform an evaluation of goodwill on an annual basis or more frequently if
circumstances indicate a potential impairment. The annual test for impairment is conducted as of December 1. The Company’s
reporting units used to assess potential goodwill impairment are the same as its operating segments. The Company has two reportable
segments: Corporate, which is comprised primarily of business customers,
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2.
Recent Accounting Pronouncements
3.
Property and Equipment
(in millions) December 31,
2014
2013
Land
$
27.7
$
27.7
Machinery and equipment
54.3
53.0
Building and leasehold improvements
105.1
104.8
Computer and data processing equipment
65.6
61.2
Computer software
10.6
30.9
Furniture and fixtures
21.7
21.6
Construction in progress
24.7
10.9
Property and equipment
309.7
310.1
Less: accumulated depreciation
172.5
179.0
Property and equipment, net
$
137.2
$
131.1
4.
Goodwill and Other Intangible Assets