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98 UNUM • 2014 ANNUAL REPORT
Notes To Consolidated Financial Statements
Accounting Updates Outstanding:
Accounting Standards
Codification (ASC) Description Date of Adoption
Effect on Financial
Statements
ASC 606
“Revenue from
Contracts with
Customers”
This update supersedes virtually all existing guidance
regarding the recognition of revenue from customers.
Specifically excluded from the scope of this update are
insurance contracts, although our fee-based service products
are included within the scope. The core principal of this
guidance is that revenue recognition should depict the
transfer of goods or services to customers in an amount that
reflects the consideration to which an entity expects to be
entitled in exchange for those goods or services. The
guidance is to be applied retrospectively.
January 1, 2017 The adoption of
this update will
not have a
material effect
on our financial
position or results
of operations.
ASC 860
“Transfers and
Servicing”
This update changes the accounting for repurchase-to-maturity
transactions and linked repurchase financings to secured
borrowing accounting, which is consistent with the accounting
for other repurchase agreements. The update also requires
disclosures for repurchase agreements, securities lending
transactions, and repurchase-to-maturity transactions. The
guidance is to be applied retrospectively for transactions
outstanding on the effective date of the update.
January 1, 2015, except
for certain disclosures,
which will be effective
April 1, 2015
The adoption of
this update will
expand our
disclosures but
will not impact
our financial
position or results
of operations.
ASC 323
“Investments —
Equity Method and
Joint Ventures”
This update permits entities to make an accounting policy
election to account for investments in qualified affordable
housing projects using the proportional amortization method
if certain conditions are met. Under the proportional
amortization method, an entity amortizes the initial cost of
the investment in proportion to the tax credits and other tax
benefits received and recognizes the net investment
performance in the income statement as a component of
income tax expense (benefit). Additional disclosures
concerning investments in qualified affordable housing
projects are also required. We have elected to adopt this
guidance, which will be applied retrospectively.
January 1, 2015 See table
as follows.
Our retrospective adoption of the update to ASC 323 as of January 1, 2015 will result in a cumulative effect decrease in stockholders’
equity as of January 1, 2015, 2014, and 2013 of approximately $30 million, $19 million, and $8 million, respectively. Our net income and
earnings per share assuming dilution will be impacted as follows:
Year Ended December 31
(in millions, except per share data) 2014 2013 2012
per share per share per share
Net Income, Before Adoption $413.4 $ 1.61 $858.1 $ 3.23 $894.4 $ 3.17
After-tax Impact of Adoption (11.3) (0.04) (11.1) (0.04) (6.3) (0.02)
Net Income, After Adoption $402.1 $ 1.57 $847.0 $ 3.19 $888.1 $ 3.15