Xerox 2014 Annual Report Download - page 83

The following table summarizes certain significant costs and expenses that require management estimates for the
three years ended December 31, 2014:
Year Ended December 31,
Expense/(Income) 2014 2013 2012
Provisions for restructuring and asset impairments - continuing operations $ 128 $115 $149
Provisions for restructuring and asset impairments - discontinued operations 2 74
Provision for receivables 53 123 127
Provisions for litigation and regulatory matters 11 (34)(1)
Provisions for obsolete and excess inventory 26 35 30
Provision for product warranty liability 25 28 29
Depreciation and obsolescence of equipment on operating leases 297 283 279
Depreciation of buildings and equipment (1) 324 332 354
Amortization of internal use software (1) 139 137 114
Amortization of product software 62 43 19
Amortization of acquired intangible assets (1) 315 305 301
Amortization of customer contract costs (1) 128 100 92
Defined pension benefits - net periodic benefit cost 82 267 300
Retiree health benefits - net periodic benefit cost 3 111
Income tax expense - continuing operations 259 253 256
Income tax expense - discontinued operations 6 27 21
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(1) Excludes amounts related to our ITO business which is held for sale and reported as a discontinued operation at December 31, 2014. Refer
to Note 4 - Divestitures for additional information regarding this pending sale.
Changes in Estimates
In the ordinary course of accounting for the items discussed above, we make changes in estimates as appropriate
and as we become aware of new or revised circumstances surrounding those estimates. Such changes and
refinements in estimation methodologies are reflected in reported results of operations in the period in which the
changes are made and, if material, their effects are disclosed in the Notes to the Consolidated Financial Statements
and in Management's Discussion and Analysis of Financial Condition and Results of Operations.
New Accounting Standards and Accounting Changes
Except for the Accounting Standard Updates (ASU's) discussed below, the new ASU's issued by the FASB during the
last two years did not have any significant impact on the Company.
Income Statement
In January 2015, the FASB issued ASU 2015-01 Income Statement-Extraordinary and Unusual Items (Subtopic
225-20) - Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items. ASU
2015-01 eliminates from GAAP the concept of extraordinary items. ASU 2015-01 is effective for our fiscal year
ending December 31, 2016, with early adoption permitted. The standard primarily involves presentation and
disclosure and, therefore, is not expected to have a material impact on our financial condition, results of operations
or cash flows.
Business Combinations
In November 2014, the FASB issued ASU 2014-17,Business Combinations (Topic 805) - Pushdown Accounting.
The amendments in this Update provide an acquired entity with an option to apply pushdown accounting in its
separate financial statements. ASU 2014-17 was effective on November 18, 2014. The adoption of this standard did
not have a material impact on our financial condition or results of operations.
Derivatives and Hedging
In November 2014, the FASB issued ASU 2014-16,Derivatives and Hedging (Topic 815) - Determining Whether the
Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity. ASU
2014-16 does not change the current criteria in GAAP for determining when separation of certain embedded
derivative features in a hybrid financial instrument. The amendments clarify how current GAAP should be interpreted
in evaluating the economic characteristics and risks of a host contract in a hybrid financial instrument that is issued in
the form of a share. ASU 2014-16 is effective for our fiscal year ending December 31, 2016, with early adoption
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