CenterPoint Energy 2015 Annual Report Download - page 92

computingarrangementdoesnotincludeasoftwarelicense,thecustomershouldaccountforthearrangementasaservicecontract.Theguidancewillnotchangea
customer’saccountingforservicecontracts.ASU2015-05iseffectiveforfiscalyears,andinterimperiodswithinthefiscalyears,beginningafterDecember15,
2015and may be adopted either prospectively orretrospectively. CenterPointEnergywill adopt ASU 2015-05prospectivelyonJanuary1, 2016. CenterPoint
EnergydoesnotbelievethatASU2015-05willhaveamaterialimpactonitsfinancialposition,resultsofoperations,cashflowsanddisclosures.
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (ASU 2014-09), which
supersedes most current revenue recognition guidance. ASU 2014-09 provides a comprehensive new revenue recognition model that requires revenue to be
recognizedinamannerthatdepictsthetransferofgoodsorservicestoacustomeratanamountthatreflectstheconsiderationexpectedtobereceivedinexchange
forthosegoodsorservices.ASU2014-09wasinitiallyeffectiveforfiscalyears,andinterimperiodswithinthoseyears,beginningafterDecember15,2016.Early
adoptionisnotpermitted,andentitieshavetheoptionofusingeitherafullretrospectiveoramodifiedretrospectiveadoptionapproach.InAugust2015,theFASB
issuedAccountingStandardUpdateNo.2015-14,Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date ,whichdelaystheeffective
date of ASU 2014-09 by one year.  CenterPoint Energy is currently evaluating the impact that ASU 2014-09 will have on its financial position, results of
operations,cashflowsanddisclosures,andwilladoptASU2014-09onJanuary1,2018aspermittedbythenewguidance.
InJuly2015,theFASBissuedAccountingStandardsUpdateNo.2015-11,Inventory (Topic 330) Simplifying the Measurement of Inventory (ASU2015-11).
ASU 2015-11 changes the subsequent measurement guidance for inventory accounted for using methods other than the last in, first out (LIFO) and Retail
Inventorymethods.Companieswillsubsequentlymeasureinventoryatthelowerofcostandnetrealizablevalue.Netrealizablevalueistheestimatedsellingprice
in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for
inventorymeasuredusingLIFOortheretailinventorymethod.ASU2015-11iseffectiveforfiscalyears,andinterimperiodswithinthoseyears,beginningafter
December15,2016,withearlyadoptionpermitted.CenterPointEnergydoesnotbelievethatASU2015-11willhaveamaterialimpactonitsfinancialposition,
resultsofoperations,cashflowsanddisclosures.
InNovember2015,theFASBissuedAccountingStandardsUpdateNo.2015-17,Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes
(ASU2015-17). ASU2015-17 requiresdeferredtaxliabilities andassetsbe classifiedasnoncurrent inaclassified statement offinancialposition. CenterPoint
EnergyadoptedASU2015-17retrospectivelystartingwithfiscalyear2015.Assuch,certainpriorperiodamountshavebeenclassifiedtoconformtothecurrent
presentation.IntheConsolidatedBalanceSheetasofDecember31,2014,CenterPointEnergyreclassified$683millionfromcurrentdeferredincometaxliabilities
toincreasedeferredincometaxeswithinnon-currentliabilities.SeeNote13foradditionalinformation.
Managementbelievesthatotherrecentlyissuedstandards,whicharenotyeteffective,willnothaveamaterialimpactonCenterPointEnergy’sconsolidated
financialposition,resultsofoperationsorcashflowsuponadoption.
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