Delta Airlines 2015 Annual Report Download - page 66

TableofContents
DisclosuresforInvestmentsinCertainEntitiesThatCalculateNetAssetValueperShare
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)."Underthenewstandard,investmentsforwhichfairvalueismeasuredatnetassetvaluepershare(oritsequivalent)usingthepracticalexpedientwill
nolongerbecategorizedinthefairvaluehierarchy.ItiseffectiveforinterimandannualreportingperiodsbeginningafterDecember15,2015,butearlyadoption
ispermitted.WewilladoptthisstandardeffectiveJanuary1,2016.WearecurrentlyassessinghowtheadoptionofthisstandardwillimpactourConsolidated
FinancialStatementsasourpensionplanhasasignificantnumberofinvestmentsmeasuredatnetassetvalue.
BalanceSheetClassificationofDeferredTaxes
InNovember2015,theFASBissuedASUNo.2015-17,"BalanceSheetClassificationofDeferredTaxes."Thisstandardrequiresthatdeferredtaxliabilities
andassetsbeclassifiedasnoncurrentonthebalancesheet.ItiseffectiveforinterimandannualperiodsbeginningafterDecember15,2016,butearlyadoptionis
permitted.WeearlyadoptedthisstandardintheDecember2015quarter,whichweaccountedforasachangeinaccountingprincipleandappliedtheguidance
retrospectively.Thischangeresultsinthereclassificationof$3.3billionfromcurrentassetstodeferredincometaxes,netinotherassetsonourDecember31,2014
ConsolidatedBalanceSheet.
FinancialInstruments
InJanuary2016,theFASBissuedASUNo.2016-01,"FinancialInstruments—Overall(Subtopic825-10)."Thisstandardmakesseveralmodificationsto
Subtopic825-10includingtheeliminationoftheavailable-for-saleclassificationofequityinvestments,andrequiresequityinvestmentswithreadilydeterminable
fairvaluestobemeasuredatfairvaluewithchangesinfairvaluerecognizedinnetincome.ItiseffectiveforinterimandannualperiodsbeginningafterDecember
15,2017.
OurinvestmentsintheparentcompaniesofAeroméxicoandGOLarecurrentlyaccountedforasavailable-for-salewithchangesinfairvaluerecognizedin
othercomprehensiveincome.Atthetimeofadoption,anyamountsinaccumulatedothercomprehensiveincome/(loss)("AOCI")relatedtoequityinvestments
wouldbereclassifiedtonon-operatingexpense/income.AsofDecember31,2015,anetunrealizedlossof$66millionrelatedtotheseinvestmentswasrecordedin
AOCIonourConsolidatedBalanceSheet.
Cash and Cash Equivalents and Short-Term Investments
Short-term,highlyliquidinvestmentswithmaturitiesofthreemonthsorlesswhenpurchasedareclassifiedascashandcashequivalents.Investmentswith
maturitiesofgreaterthanthreemonths,butnotinexcessofoneyear,whenpurchasedareclassifiedasshort-terminvestments.Investmentswithmaturitiesbeyond
oneyearwhenpurchasedmaybeclassifiedasshort-terminvestmentsiftheyareexpectedtobeavailabletosupportourshort-termliquidityneeds.Allshort-term
investmentsareclassifiedaseitheravailable-for-saleorheld-to-maturityandrealizedgainsandlossesarerecordedusingthespecificidentificationmethod.
Accounts Receivable
Accountsreceivableprimarilyconsistofamountsduefromcreditcardcompaniesfromthesaleofpassengerairlinetickets,customersofouraircraft
maintenanceandcargotransportationservicesandothercompaniesforthepurchaseofmileagecreditsunderourfrequentflyerprogram(the"SkyMilesProgram").
Weprovideanallowanceforuncollectibleaccountsequaltotheestimatedlossesexpectedtobeincurredbasedonhistoricalchargebacks,write-offs,bankruptcies
andotherspecificanalyses.Baddebtexpensewasnotmaterialinanyperiodpresented.
Inventories
SpareParts.Inventoriesofexpendablepartsrelatedtoflightequipment,whichcannotbeeconomicallyrepaired,reconditionedorreusedafterremovalfromthe
aircraft,arecarriedatmovingaveragecostandchargedtooperationsasconsumed.Anallowanceforobsolescenceisprovidedovertheremainingusefullifeofthe
relatedfleet.Wealsoprovideallowancesforpartsidentifiedasexcessorobsoletetoreducethecarryingcoststothelowerofcostornetrealizablevalue.These
partsareassumedtohaveanestimatedresidualvalueof5%oftheoriginalcost.
60