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DR PEPPER SNAPPLE GROUP, INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
63
Recently Issued Accounting Standards
In April 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2014-08,
Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360) ("ASU 2014-08"). The
amendments in ASU 2014-08 provide guidance for the recognition and disclosure of discontinued operations. ASU 2014-08 is
effective for fiscal years, and interim periods within those years, beginning after December 15, 2014. The Company does not
anticipate a material impact to the Company's financial position, results of operations or cash flows as a result of this change.
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"). The
new guidance sets forth a new five-step revenue recognition model which replaces the prior revenue recognition guidance in its
entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance that have historically
existed in U.S. GAAP. The underlying principle of the new standard is that a business or other organization will recognize revenue
to depict the transfer of promised goods or services to customers in an amount that reflects what it expects in exchange for the
goods or services. The standard also requires more detailed disclosures and provides additional guidance for transactions that were
not addressed completely in the prior accounting guidance. ASU 2014-09 provides alternative methods of initial adoption and is
effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. Early adoption
is not permitted. The Company is currently evaluating the impact that this standard will have on the consolidated financial statements.
In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40):
Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”), to provide guidance on
management's responsibility to perform interim and annual assessments of an entity’s ability to continue as a going concern and
to provide related disclosure requirements. ASU 2014-15 applies to all entities and is effective for annual periods ending after
December 15, 2016, and interim periods thereafter, with early adoption permitted. Management does not expect adoption of the
standard to have a significant impact on the consolidated financial statements.
Recently Adopted Provisions of U.S. GAAP
In accordance with U.S. GAAP, the following provisions, which had no material impact on the Company's financial position,
results of operations or cash flows, were effective as of January 1, 2014:
• the requirement to provide disclosures related to obligations resulting from joint and several liability arrangements from
which the total amount of the obligation is fixed at the reporting date; and
• the requirement related to the financial statement presentation of unrecognized tax benefits when a net operating loss
carryforward, a similar tax loss or a tax credit carryforward exists.
3. Acquisitions
2014 Acquisition
On October 31, 2014, the Company acquired certain assets and liabilities of Davis Beverages Group, Inc. and Davis Bottling
Co., Inc. (“Davis”) to strengthen the Company’s route to market in the U.S. and support efforts to build and enhance the Company's
leading brands. The fair value of the consideration paid for this acquisition was $21 million and was settled by $19 million in cash
and a $2 million holdback liability to satisfy any working capital adjustments and applicable indemnification claims, pursuant to
the terms of the purchase agreement.
The following table summarizes the preliminary allocation of fair value of the assets acquired and liabilities assumed by major
class for the acquisition (in millions):
Fair Value Useful Life
Property, plant & equipment $ 10 1 - 10 years
Distribution rights: indefinite-lived 3 —
Goodwill 5 —
Current assets, net of current liabilities assumed 3 —
Total $ 21