CHS 2014 Annual Report Download - page 38

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reported amounts of assets and liabilities and disclosure
CHS is a nonexempt agricultural cooperative and files a of contingent assets and liabilities at the date of the
consolidated federal income tax return with our 80% or financial statements and the reported amounts of reve-
more owned subsidiaries. We are subject to tax on nues and expenses during the reporting period. Actual
income from nonpatronage sources, non-qualified results could differ from those estimates.
patronage distributions and undistributed patronage-
sourced income. Income tax expense is primarily the
current tax payable for the period and the change In May 2014, the FASB issued ASU No. 2014-09, ‘‘Rev-
during the period in certain deferred tax assets and lia- enue from Contracts with Customers.’’ ASU No. 2014-09
bilities. Deferred income taxes reflect the impact of tem- requires an entity to recognize revenue to depict the
porary differences between the amounts of assets and transfer of promised goods or services to customers in
liabilities recognized for financial reporting purposes an amount that reflects the consideration to which the
and such amounts recognized for federal and state entity expects to be entitled in exchange for those
income tax purposes, based on enacted tax laws and goods or services. The guidance also requires an entity
statutory tax rates applicable to the periods in which the to disclose sufficient qualitative and quantitative infor-
differences are expected to affect taxable income. Valu- mation surrounding the nature, amount, timing and
ation allowances are established, when necessary, to uncertainty of revenue and cash flows arising from con-
reduce deferred tax assets to the amount expected to be tracts from customers. This ASU supersedes the rev-
realized. enue recognition requirements in Topic 605, Revenue
Recognition, and most industry-specific guidance
throughout the Industry Topics of the Codification. The
The preparation of financial statements in conformity amendments in this standard are effective beginning
with accounting principles generally accepted in the with our fiscal year starting September 1, 2017. We are
United States of America (U.S. GAAP) requires manage- currently evaluating the impact the adoption will have
ment to make estimates and assumptions that affect the on our consolidated financial statements in fiscal 2018.
36 CHS 2014
ONE: Summary of Significant Accounting Policies, continued
Income Taxes
Recent Accounting Pronouncements
Use of Estimates