Pitney Bowes 2013 Annual Report Download - page 59

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PITNEY BOWES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular dollars in thousands, except per share amounts)
48
Translation of Non-U.S. Currency Amounts
In general, the functional currency of our foreign operations is the local currency. Assets and liabilities of subsidiaries operating outside
the U.S. are translated at rates in effect at the end of the period and revenue and expenses are translated at average monthly rates during
the period. Net deferred translation gains and losses are included as a component of accumulated other comprehensive income.
Loss Contingencies
In the ordinary course of business, we are routinely defendants in, or party to, a number of pending and threatened legal actions. On a
quarterly basis, we review the status of each significant matter and assess the potential financial exposure. If the potential loss from any
claim or legal action is considered probable and can be reasonably estimated, we establish a liability for the estimated loss. The assessment
of the ultimate outcome of each claim or legal action and the determination of the potential financial exposure requires significant
judgment. Estimates of potential liabilities for claims or legal actions are based only on information that is available at that time. As
additional information becomes available, we may revise our estimates, and these revisions could have a material impact on our results
of operations and financial position. Legal fees are expensed as incurred.
New Accounting Pronouncements
In January 2013, the Financial Accounting Standards Board issued Accounting Standards Update No. 2013-01, Clarifying the Scope of
Disclosures about Offsetting Assets and Liabilities (ASU 2013-01). ASU 2013-01 requires an entity to disclose gross and net information
about transactions that are (1) offset in the financial statements or (2) subject to an enforceable master netting arrangement or similar
agreement, regardless of whether the transactions are actually offset in the statement of financial position. The disclosure requirements
are effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The
amounts impacting our disclosure were immaterial at December 31, 2013 and 2012.
In February 2013, the Financial Accounting Standards Board issued Accounting Standards Update No. 2013-02, Reporting of Amounts
Reclassified Out of Accumulated Other Comprehensive Income (ASU 2013-02). ASU 2013-02 requires an entity to present either
parenthetically on the face of the financial statements, or in the notes, significant amounts reclassified from each component of accumulated
other comprehensive income and the income statement line items affected by the reclassification. The new standard is effective for annual
reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The adoption of this standard
resulted in additional disclosures, but did not impact our financial condition, results of operations or cash flows.
In March 2013, the Financial Accounting Standards Board issued Accounting Standards Update No. 2013-05, Foreign Currency Matters
(ASU 2013-05). ASU 2013-05 resolves diversity in practice regarding the release into net income of the cumulative translation adjustment
upon derecognition of a subsidiary or a group of assets within a foreign entity. The new guidance is effective for fiscal years beginning
January 1, 2014. We do not expect the application of this new guidance will have a material impact on our financial condition or results
of operations.
In July 2013, the Financial Accounting Standards Board issued Accounting Standards Update No. 2013-11, Income Taxes (Topic 740) -
Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward or Tax Credit Carryforward Exists (ASU 2013-11).
ASU 2013-11 provides explicit guidance regarding the presentation in the statement of financial position of an unrecognized tax benefit
when a net operating loss carryforward or a tax credit carryfoward exists. The new guidance is effective for fiscal years, and interim
periods within those years, beginning after December 15, 2013. We do not expect the application of this new guidance will have a material
impact on our financial position.