Tyson Foods 2015 Annual Report Download - page 54
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Please find page 54 of the 2015 Tyson Foods annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Investments: Wehaveinvestmentsinjointventuresandotherentities.Wegenerallyusethecostmethodofaccountingwhenourvotinginterestsarelessthan20
percent.Weusetheequitymethodofaccountingwhenourvotinginterestsareinexcessof20percentandwedonothaveacontrollinginterestoravariable
interestinwhichwearetheprimarybeneficiary.InvestmentsinjointventuresandotherentitiesarereportedintheConsolidatedBalanceSheetsinOtherAssets.
Wealsohaveinvestmentsinmarketabledebtsecurities.Wehavedeterminedallofourmarketabledebtsecuritiesareavailable-for-saleinvestments.These
investmentsarereportedatfairvaluebasedonquotedmarketpricesasofthebalancesheetdate,withunrealizedgainsandlosses,netoftax,recordedinother
comprehensiveincome.Theamortizedcostofdebtsecuritiesisadjustedforamortizationofpremiumsandaccretionofdiscountstomaturity.Suchamortizationis
recordedininterestincome.Thecostofsecuritiessoldisbasedonthespecificidentificationmethod.Realizedgainsandlossesonthesaleofdebtsecuritiesand
declinesinvaluejudgedtobeotherthantemporaryarerecordedonanetbasisinotherincome.Interestanddividendsonsecuritiesclassifiedasavailable-for-sale
arerecordedininterestincome.
Accrued Self-Insurance: Weuseacombinationofinsuranceandself-insurancemechanismsinanefforttomitigatethepotentialliabilitiesforhealthandwelfare,
workers’compensation,autoliabilityandgeneralliabilityrisks.Liabilitiesassociatedwithourrisksretainedareestimated,inpart,byconsideringclaims
experience,demographicfactors,severityfactorsandotheractuarialassumptions.
Other Current Liabilities: OthercurrentliabilitiesatOctober3,2015,andSeptember27,2014,include:
inmillions
2015
2014
Accruedsalaries,wagesandbenefits $ 478
$ 490
Accruedmarketing,advertisingandpromotionexpense 192
185
Other 488
532
Totalothercurrentliabilities $ 1,158
$ 1,207
Defined Benefit Plans: WerecognizethefundedstatusofdefinedpensionandpostretirementplansintheConsolidatedBalanceSheets.Thefundedstatusis
measuredasthedifferencebetweenthefairvalueoftheplanassetsandthebenefitobligation.Wemeasureourplanassetsandliabilitiesattheendofourfiscal
year.Foradefinedbenefitpensionplan,thebenefitobligationistheprojectedbenefitobligation;foranyotherdefinedbenefitpostretirementplan,suchasa
retireehealthcareplan,thebenefitobligationistheaccumulatedpostretirementbenefitobligation.Anyoverfundedstatusisrecognizedasanassetandany
underfundedstatusisrecognizedasaliability.Anytransitionalasset/liability,priorservicecostoractuarialgain/lossthathasnotyetbeenrecognizedasa
componentofnetperiodiccostisrecognizedinaccumulatedothercomprehensiveincome.Accumulatedothercomprehensiveincomewillbeadjustedasthese
amountsaresubsequentlyrecognizedasacomponentofnetperiodicbenefitcostsinfutureperiods.
Derivative Financial Instruments: Wepurchasecertaincommodities,suchasgrainsandlivestockinthecourseofnormaloperations.Aspartofourcommodity
riskmanagementactivities,weusederivativefinancialinstruments,primarilyfuturesandoptions,toreduceourexposuretovariousmarketrisksrelatedtothese
purchases,aswellastochangesinforeigncurrencyexchangerates.Contracttermsofafinancialinstrumentqualifyingasahedgeinstrumentcloselymirrorthose
ofthehedgeditem,providingahighdegreeofriskreductionandcorrelation.Contractsdesignatedandhighlyeffectiveatmeetingriskreductionandcorrelation
criteriaarerecordedusinghedgeaccounting.Ifaderivativeinstrumentisaccountedforasahedge,changesinthefairvalueoftheinstrumentwillbeoffseteither
againstthechangeinfairvalueofthehedgedassets,liabilitiesorfirmcommitmentsthroughearningsorrecognizedinothercomprehensiveincome(loss)untilthe
hedgeditemisrecognizedinearnings.Theineffectiveportionofaninstrument’schangeinfairvalueisimmediatelyrecognizedinearningsasacomponentofcost
ofsales.Instrumentsweholdaspartofourriskmanagementactivitiesthatdonotmeetthecriteriaforhedgeaccountingaremarkedtofairvaluewithunrealized
gainsorlossesreportedcurrentlyinearnings.Changesinmarketvalueofderivativesusedinourriskmanagementactivitiesrelatingtoforwardsalescontractsare
recordedinsales,whilechangessurroundinginventoriesonhandoranticipatedpurchasesofinventoriesorsuppliesarerecordedincostofsales.Wegenerallydo
nothedgeanticipatedtransactionsbeyond18months.
Revenue Recognition: Werecognizerevenuewhentitleandriskoflossaretransferredtocustomers,whichisgenerallyondeliverybasedontermsofsale.
Revenueisrecognizedasthenetamountestimatedtobereceivedafterdeductingestimatedamountsfordiscounts,tradeallowancesandproductreturns.
Litigation Reserves: Thereareavarietyoflegalproceedingspendingorthreatenedagainstus.Accrualsarerecordedwhenitisprobablealiabilityhasbeen
incurredandtheamountoftheliabilitycanbereasonablyestimatedbasedoncurrentlaw,progressofeachcase,opinionsandviewsoflegalcounselandother
advisers,ourexperienceinsimilarmattersandintendedresponsetothelitigation.Theseamounts,whicharenotdiscountedandareexclusiveofclaimsagainst
thirdparties,areadjustedperiodicallyasassessmenteffortsprogressoradditionalinformationbecomesavailable.Weexpenseamountsforadministeringor
litigatingclaimsasincurred.AccrualsforlegalproceedingsareincludedinOthercurrentliabilitiesintheConsolidatedBalanceSheets.
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