ADP 2014 Annual Report Download - page 52

In April 2015, the FA SB issued ASU 2015-03, "Simplifying the Presentation of Debt Issuance Costs." The update requires debt issuance costs related to a
recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as
an asset. The update requires retrospective application. ASU 2015-03 is effective for fiscal years, and interim reporting periods within those years, beginning after
December 15, 2015. Early adoption is permitted. The impact of ASU 2015-03 is dependent upon the nature of future debt issuances, if any.
In May 2014, the FA SB issued ASU 2014-09, "Revenue from Contracts with Customers," which outlines a single comprehensive model for entities to use in
accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance.
ASU 2014-09 requires an entity to recognize revenue depicting the transfer of goods or services to customers in an amount that reflects the consideration to which
the entity expects to be entitled in exchange for those goods or services. A SU 2014-09 will also result in enhanced revenue related disclosures. ASU 2014-09 is
effective for fiscal years, and interim reporting periods within those years, beginning after December 15, 2017. Early adoption is permitted. The Company has not
yet determined the impact of ASU 2014-09 on its consolidated results of operations, financial condition, or cash flows.
In April 2014, the FA SB issued ASU 2014-08, "Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity." ASU 2014-08
requires that a disposal representing a strategic shift that has (or will have) a major effect on an entity’s financial results or a business activity classified as held for
sale should be reported as discontinued operations. ASU 2014-08 also expands the disclosure requirements for discontinued operations and adds new disclosures
for individually significant dispositions that do not qualify as discontinued operations. ASU 2014-08 is effective prospectively for fiscal years, and interim
reporting periods within those years, beginning after December 15, 2014. The impact of A SU 2014-08 is dependent upon the nature of dispositions, if any, after
adoption.
In July 2014, the Company adopted ASU 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating L oss Carryforward, a Similar Tax Loss,
or a Tax Credit Carryforward Exists.” ASU 2013-11 requires netting of unrecognized tax benefits against a deferred tax asset for a loss or other carryforward that
would apply in settlement of the uncertain tax position. The adoption of ASU 2013-11 did not have a material impact on the Company's consolidated results of
operations, financial condition, or cash flows.
NOTE 2. DIV ESTITURES
On J une 26, 2015 , the Company completed the sale of its Procure-to-Pay business ("P2P") for a pre-tax gain of $102.3 million , less costs to sell, and recorded
such gain within earnings from discontinued operations on the Statements of Consolidated Earnings. In connection with the disposal of P2P, the Company has
classified the results of operations of this business as discontinued operations for all periods presented. P2P was previously reported in the Employer Services
segment.
On September 30, 2014 , the Company completed the tax free spin-off of its former Dealer Services business, which was a separate reportable segment, into an
independent publicly traded company called CDK Global, Inc. ("CDK "). As a result of the spin-off, ADP stockholders of record on September 24, 2014 (the
"record date") received one share of CDK common stock on September 30, 2014, par value $0.01 per share, for every three shares of ADP common stock held by
them on the record date and cash for any fractional shares of CDK common stock. ADP distributed approximately 160.6 million shares of CDK common stock in
the distribution. The spin-off was made without the payment of any consideration or the exchange of any shares by A DP stockholders. The spin-off, transitional,
and on-going relationships between ADP and CDK are governed by the Separation and Distribution Agreement entered into between ADP and CDK and certain
other ancillary agreements.
Incremental costs associated with the spin-off of CDK and divestiture of P2P of $50.1 million for fiscal 2015 are included in discontinued operations on the
Statements of Consolidated Earnings.
On February 28, 2014 , the Company completed the sale of its Occupational Health and Safety services business ("OHS") for a pre-tax gain of $15.6 million , less
costs to sell, and recorded such gain within earnings from discontinued operations on the Statements of Consolidated Earnings. In connection with the disposal of
OHS, the Company classified the results of this business as discontinued operations for all periods presented. OHS was previously reported in the Employer
Services segment.
On December 17, 2012 , the Company completed the sale of its Taxware Enterprise Service business ("Taxware") for a pre-tax gain of $58.8 million , less costs to
sell, and recorded such gain within earnings from discontinued operations on the Statements of Consolidated Earnings. In connection with the disposal of Taxware,
the Company has classified the results of this business as discontinued operations for all periods presented. Taxware was previously reported in the Employer
Services segment.
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