CenturyLink 2015 Annual Report Download - page 159

The adoption of the ASUs had no impact on our net cash provided by operating activities, but did change
the presentation of the adjustments to reconcile net income and changes in other noncurrent assets and liabilities,
net for the years ended December 31, 2014 and 2013.
In 2015, we adopted Accounting Standards Update (“ASU”) 2015-07 (“ASU 2015-07”), which
retrospectively changed the disclosure requirements for certain investments that are valued based upon net asset
value (“NAV”) as a practical expedient. ASU 2015-07 was issued to eliminate diversity among entities on what
level in the fair value hierarchy such investments were assigned. Under ASU 2015-07, investments valued using
NAV as a practical expedient are no longer assigned to a level in the fair value hierarchy rather the value
associated with the investments is disclosed in a reconciliation of the total investments measured at fair value.
For us, the change in disclosure requirements as a result of the adoption of ASU 2015-07, only affects the
disclosure of the fair value of our pension and post-retirement plan assets included in footnote 7, “Employee
Benefits”. ASU 2015-07 results in $5.749 billion and $264 million of pension plan and post-retirement plan assets,
respectively as of December 31, 2014, not being assigned to a level in the fair value hierarchy but rather disclosed
as a separate line added to the fair value hierarchy table to present total plan assets. There was no change in total
pension or post-retirement plan assets as of December 31, 2014 due to the adoption of ASU 2015-07.
Recent Accounting Pronouncements
Revenue Recognition
On May 28, 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers”
(“ASU 2014-09” or “new standard”). The new standard replaces virtually all existing generally accepted
accounting principles (“GAAP”) on revenue recognition and replaces them with a principles-based approach for
determining revenue recognition using a new five step model. The core principle of ASU 2014-09 is that an
entity 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.
ASU 2014-09 also includes new accounting principles related to the deferral and amortization of contract
acquisition and fulfillment costs. We currently do not defer any contract acquisition costs and defer contract
fulfillment costs only up to the extent of any revenue deferred.
On July 9, 2015, the FASB approved the deferral of the effective date of ASU 2014-09 by one year until
January 1, 2018. Early adoption is permitted as of January 1, 2017. ASU 2014-09 may be adopted by applying
the provisions of the new standard on a retrospective basis to the periods included in the financial statements or
on a modified retrospective basis which would result in the recognition of a cumulative effect of adopting
ASU 2014-09 in the first quarter of 2017, if adopting early, otherwise in the first quarter of 2018. We have not
yet decided which implementation method we will adopt. We are studying the new standard and are in the early
stages of assessing the impact the new standard will have on us and our consolidated financial statements. We
cannot at this time, however, provide any estimate of the impact of adopting the new standard.
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