Black & Decker 2014 Annual Report Download - page 76

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The Company records uncertain tax positions in accordance with ASC 740, which requires a two step process. First,
management determines whether it is more likely than not that a tax position will be sustained based on the technical merits of
the position and second, for those tax positions that meet the more likely than not threshold, management recognizes the largest
amount of the tax benefit that is greater than 50 percent likely to be realized upon ultimate settlement with the related taxing
authority. The Company maintains an accounting policy of recording interest and penalties on uncertain tax positions as a
component of the income tax expense on continuing operations in the Consolidated Statement of Operations.
The Company is subject to tax in a number of locations, including many state and foreign jurisdictions. Significant judgment is
required when calculating the worldwide provision for income taxes. Many factors are considered when evaluating and estimating
the Company's tax positions and tax benefits, which may require periodic adjustments and which may not accurately anticipate
actual outcomes. It is reasonably possible that the amount of the unrecognized benefit with respect to certain of the Company's
unrecognized tax positions will significantly increase or decrease within the next 12 months. These changes may be the result of
settlements of ongoing audits or final decisions in transfer pricing matters. The Company periodically assesses its liabilities and
contingencies for all tax years still subject to audit based on the most current available information, which involves inherent
uncertainty.
EARNINGS PER SHARE — Basic earnings per share equals net earnings attributable to Stanley Black & Decker, Inc., less
earnings allocated to restricted stock units with non-forfeitable dividend rights, divided by weighted-average shares outstanding
during the year. Diluted earnings per share include the impact of common stock equivalents using the treasury stock method
when the effect is dilutive.
NEW ACCOUNTING STANDARDS — In January 2015, the Financial Accounting Standards Board ("FASB") issued
Accounting Standards Update ("ASU") 2015-01, "Income Statement - Extraordinary and Unusual Items (Subtopic 225-20);
Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items," which eliminates from GAAP
the concept of extraordinary items stating that the concept causes uncertainty because it is unclear when an item should be
considered both unusual and infrequent and that users do not find the classification and presentation necessary to identify those
events and transactions. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after
December 15, 2015, with early adoption permitted provided the guidance is applied from the beginning of the fiscal year of
adoption. The Company does not expect this standard to have an impact on its consolidated financial statements upon
adoption.
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," which requires management of a
company to evaluate whether there is substantial doubt about the company’s ability to continue as a going concern. This ASU
is effective for the annual reporting period ending after December 15, 2016, and for interim and annual reporting periods
thereafter, with early adoption permitted. The Company does not expect this standard to have an impact on its consolidated
financial statements upon adoption.
In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)." The new revenue
recognition standard outlines a comprehensive model for companies to use in accounting for revenue arising from contracts
with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The new
model provides a five-step analysis in determining when and how revenue is recognized. The core principle of the new
guidance is that a company should recognize revenue to depict the transfer of promised 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. This
ASU is effective for annual reporting periods (and interim reporting periods within those years) beginning after December 15,
2016, and shall be applied retrospectively to each period presented or as a cumulative-effect adjustment as of the date of
adoption. Early adoption of this ASU is not permitted. The Company is currently evaluating the new guidance to determine
the impact it may have to its consolidated financial statements.
In April 2014, the FASB issued ASU 2014-08, "Presentation of Financial Statements (Topic 205) and Property, Plant and
Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity." The
amendments contained in this update change the criteria for reporting discontinued operations and enhances the reporting
requirements for discontinued operations. Under the revised standard, a discontinued operation must represent a strategic shift
that has or will have a major effect on an entity's operations and financial results. Examples could include a disposal of a major
line of business, a major geographical area, a major equity method investment, or other major parts of an entity. The revised
standard will also allow an entity to have certain continuing cash flows or involvement with the component after the disposal.
Additionally, the standard requires expanded disclosures about discontinued operations that will provide financial statement
users with more information about the assets, liabilities, income, and expenses of discontinued operations. This ASU is