Papa Johns 2014 Annual Report Download - page 77

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64
2. Significant Accounting Policies (continued)
Noncontrolling Interests
The Company has the following four joint ventures in which there are noncontrolling interests:
Joint Venture
Redemption Feature
Location within the
Consolidated Balance Sheet
Recorded value
Star Papa, LP
Redeemable
Temporary equity
Carrying value
PJ Denver, LLC
Redeemable
Temporary equity
Redemption value
Colonel’s Limited, LLC
No redemption feature
Permanent equity
Carrying value
PJ Minnesota, LLC
No redemption feature
Permanent equity
Carrying value
Consolidated net income is required to be reported separately at amounts attributable to both the parent
and the noncontrolling interest. Additionally, disclosures are required to clearly identify and distinguish
between the interests of the parent company and the interests of the noncontrolling owners, including a
disclosure on the face of the consolidated statements of income attributable to the noncontrolling interest
holder.
See Note 6 for additional information regarding noncontrolling interests.
Foreign Currency Translation
The local currency is the functional currency for our foreign subsidiaries located in the United Kingdom,
Mexico and China. Earnings and losses are translated into U.S. dollars using monthly average exchange
rates, while assets and liabilities are translated using year-end exchange rates. The resulting translation
adjustments are included as a component of accumulated other comprehensive income (loss) net of
income taxes.
Recent Accounting Pronouncements
Revenue from Contract with Customers
In May 2014, the Financial Accounting Standards Board issued “Revenue from Contracts with
Customers” (Accounting Standards Update (“ASU”) 2014-09), a comprehensive new revenue recognition
standard that will supersede nearly all existing revenue recognition guidance under GAAP. This update
requires companies to recognize revenue at amounts that reflect the consideration to which the company
expects to be entitled in exchange for those goods or services at the time of transfer. In doing so,
companies will need to use more judgment and make more estimates than under today’s guidance. Such
estimates may include identifying performance obligations in the contract, estimating the amount of
variable consideration to include in the transaction price and allocating the transaction price to each
separate performance obligation. Companies can either apply a full retrospective adoption or a modified
retrospective adoption.
We are required to adopt the new requirements in the first quarter of 2017. We are currently evaluating
the method of adoption and its impact of the new requirements on our consolidated financial statements.
We currently do not believe the impact will be significant.