Dillard's 2015 Annual Report Download - page 54

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F-12
Company classifies accrued interest expense and penalties relating to income tax in the consolidated financial statements as
income tax expense.
Shipping and Handling—The Company records shipping and handling reimbursements in service charges and other
income. The Company records shipping and handling costs in cost of sales.
Defined Benefit Retirement Plans—The Company's defined benefit retirement plan costs are accounted for using
actuarial valuations. The Company recognizes the funded status of its defined benefit pension plans on the balance sheet and
recognizes changes in the funded status that arise during the period but that are not recognized as components of net periodic
benefit cost, within other comprehensive income, net of income taxes.
Income on and Equity in Losses of Joint Ventures—Income on and equity in losses of joint ventures includes the
Company's portion of the income or loss of the Company's unconsolidated joint ventures as well as distributions of excess cash
from a mall joint venture.
Comprehensive Income—Comprehensive income is defined as the change in equity (net assets) of a business enterprise
during a period from transactions and other events and circumstances from non-owner sources. It consists of the net income or
loss and other gains and losses affecting stockholders' equity that, under GAAP, are excluded from net income or loss. One
such exclusion is the amortization of retirement plan and other retiree benefit adjustments, which is the only item impacting our
accumulated other comprehensive loss.
Supply Concentration—The Company purchases merchandise from many sources and does not believe that the
Company was dependent on any one supplier during fiscal 2015.
Reclassifications—Certain items have been reclassified from their prior year classifications to conform to the current
year presentation. These reclassifications had no effect on net income or stockholders' equity as previously reported.
New Accounting Pronouncements
Revenue from Contracts with Customers
In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU")
No. 2014-09, Revenue from Contracts with Customers (Topic 606), which stipulates that an entity should recognize revenue to
depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity
expects to be entitled in exchange for those goods or services. To achieve this core principle, an entity should apply the
following steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3)
determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5)
recognize revenue when (or as) the entity satisfies a performance obligation. This update was amended by ASU No. 2015-14,
Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which deferred the effective date for the
Company from the first quarter of fiscal 2017 to the first quarter of fiscal 2018 with early adoption permitted. The Company is
currently assessing the impact of this update on its consolidated financial statements.
Presentation of Financial Statements - Going Concern
In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic
205-40), which requires management to evaluate, at each annual and interim reporting period, whether there are conditions or
events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date the
financial statements are issued and provide related disclosures. This ASU is effective for annual periods ending after
December 15, 2016 and interim periods thereafter. Early application is permitted. The adoption of this guidance is not
expected to have a significant impact on the Company's consolidated financial statements.
Simplifying the Presentation of Debt Issuance Costs
In April 2015, the FASB issued ASU No. 2015-03, Interest-Imputation of Interest (Subtopic 835-30): Simplifying the
Presentation of Debt Issuance Costs, to amend ASC Topic 835. The amendment adds the requirement for an entity to present
debt issuance costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset and to report
amortization of the debt issuance costs as interest expense. This update will be effective for the Company beginning in the first
quarter of fiscal 2016. The adoption of this guidance is not expected to have a significant impact on the Company's
consolidated financial statements.