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33
Business Combinations
In September 2015, the FASB issued ASU No. 2015-16, Simplifying the Accounting for Measurement-Period Adjustments, providing
new guidance related to business combinations. The new standard requires that the cumulative impact of a measurement period
adjustment, including the impact on prior periods, made to provisional amounts recorded at the acquisition date as a result of the
business combination, be recognized in the reporting period the adjustment is identified. The standard also requires separate
presentation on the face of the income statement, or disclosure in the notes, of the portion of the amount recorded in current period
earnings by line item. Prior to the issuance of the standard, such adjustments to provisional amounts were recognized retrospectively.
The new standard is effective for fiscal years beginning after December 15, 2015 and should be applied prospectively to measurement
period adjustments that occur after the effective date. Early adoption is permitted. The adoption of this new accounting guidance could
have a material impact on our financial statements in future periods upon occurrence of a measurement period adjustment.
Deferred Taxes
In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes, providing new guidance to
simplify the presentation of deferred taxes. The new standard requires that deferred tax assets and liabilities, along with any related
valuation allowance, be classified as non-current on the balance sheet. The issuance of the new standard eliminates the requirement to
perform the jurisdiction analysis based on the classifications of the underlying assets and liabilities, and as a result, each jurisdiction
will only have one net non-current deferred tax asset or liability. The new standard is effective for fiscal years beginning after
December 15, 2016 and can be applied either prospectively or retrospectively. Early adoption is permitted.
As of December 31, 2015 we early adopted ASU No. 2015-17 and applied retrospectively to all periods presented. As a result, we
reclassified $368 million of deferred tax assets from current “Deferred income taxes, net” resulting in non-current net deferred tax
assets and liabilities of $264 million and $10 million, respectively, in our Consolidated Balance Sheet as of December 31, 2014. The
adoption of this new guidance did not impact our compliance with debt covenant requirements.
10-K Activision_Master_032416_PrinterMarksAdded.pdf 33 3/24/16 11:00 PM