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Financial Review
Pfizer Inc. and Subsidiary Companies
2015 Financial Report
57
Standard Description Effective Date Effect on the Financial
Statements or Other
Significant Matters
In January 2016, the FASB issued
an update to its guidance on
recognition and measurement of
financial assets and liabilities.
Among other things, the new guidance
makes the following targeted changes to
existing guidance:
1. Requires equity investments (except
those accounted for under the equity
method of accounting or those that
result in consolidation of the investee) to
be measured at fair value with changes
in fair value recognized in net income.
However, an entity may choose to
measure equity investments that do not
have readily determinable fair values at
cost minus impairment, if any, plus or
minus changes resulting from
observable price changes in orderly
transactions for the identical or similar
investment of the same issuer.
2. Simplifies the impairment assessment of
equity investments without readily
determinable fair values by requiring a
qualitative assessment to identify
impairment. When a qualitative
assessment indicates that impairment
exists, the investment is required to be
measured at fair value.
3. Requires separate presentation of
financial assets and financial liabilities
by measurement category and form of
financial asset on the balance sheet or
the accompanying notes to the financial
statements.
4. Clarifies that an entity should evaluate
the need for a valuation allowance on a
deferred tax asset related to available-
for-sale securities in combination with
the entity’s other deferred tax assets.
January 1, 2018.
Earlier application is
not allowed for the
amendments in the
update, described
here, that have
potential to impact
our consolidated
financial statements.
We are assessing the impact
of the provisions of this new
guidance on our consolidated
financial statements.
In February 2016, the FASB issued
an update to its guidance on
leases.
The new ASU provides guidance for both
lessee and lessor accounting models.
Among other things, the new guidance
requires that a right of use asset and a lease
liability be recognized for leases with a
duration of greater than one year.
January 1, 2019.
Earlier application is
permitted
We have not yet completed
our review of the impact of
this guidance. However, we
anticipate recognition of
additional assets and
corresponding liabilities
related to leases on our
balance sheet.