Chevron 2013 Annual Report Download - page 39

Download and view the complete annual report

Please find page 39 of the 2013 Chevron annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 88

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88

Chevron Corporation 2013 Annual Report 37
For federal Superfund sites and analogous sites under
state laws, the company records a liability for its designated
share of the probable and estimable costs, and probable
amounts for other potentially responsible parties when man-
dated by the regulatory agencies because the other parties are
not able to pay their respective shares.
e gross amount of environmental liabilities is based
on the company’s best estimate of future costs using currently
available technology and applying current regulations and
the company’s own internal environmental policies. Future
amounts are not discounted. Recoveries or reimbursements
are recorded as assets when receipt is reasonably assured.
Currency Translation e U.S. dollar is the functional
currency for substantially all of the company’s consolidated
operations and those of its equity affiliates. For those opera-
tions, all gains and losses from currency remeasurement are
included in current period income. e cumulative trans-
lation eects for those few entities, both consolidated and
affiliated, using functional currencies other than the U.S.
dollar are included in “Currency translation adjustment” on
the Consolidated Statement of Equity.
Revenue Recognition Revenues associated with sales of
crude oil, natural gas, petroleum and chemicals products,
andall other sources are recorded when title passes to the
customer, net of royalties, discounts and allowances, as
applicable. Revenues from natural gas production from prop-
erties in which Chevron has an interest with other producers
are generally recognized using the entitle ment method. Excise,
value-added and similar taxes assessed by a governmental
authority on a revenue- producing transaction between a seller
and a customer are presented on a gross basis. e associated
amounts are shown as a footnote to the Consolidated State-
ment of Income, on page 30. Purchases and sales of
inventorywith the same counterparty that are entered into
incontemplation of one another (including buy/sell arrange-
ments) are combined and recorded on a net basis and reported
in “Purchased crude oil and products” on the Consolidated
Statement of Income.
Stock Options and Other Share-Based Compensation
e company issues stock options and other share-based
compensation to certain employees. For equity awards, such
as stock options, total compensation cost is based on the
grant date fair value, and for liability awards, such as stock
appreciation rights, total compensation cost is based on
the settlement value. e company recognizes stock-based
compensation expense for all awards over the service period
required to earn the award, which is the shorter of the vest-
ing period or the time period an employee becomes eligible
to retain the award at retirement. Stock options and stock
appreciation rights granted under the company’s Long-Term
Incentive Plan have graded vesting provisions by which
one-third of each award vests on the rst, second and third
anniversaries of the date of grant. e company amortizes
these graded awards on a straight-line basis.
Note 1 Summary of Significant Accounting Policies – Continued
Note 2
Changes in Accumulated Other Comprehensive Losses
e change in Accumulated Other Comprehensive Losses (AOCL) presented on the Consolidated Balance Sheet and the
impact of signicant amounts reclassied from AOCL on information presented in the Consolidated Statement of Income for
the year ending December 31, 2013, are reected in the table below.
Changes in Accumulated Other Comprehensive Losses by Component 1
Year Ending December 31, 2013
Currency
Translation
Adjustment
Unrealized Holding
Gains (Losses) on
Securities Derivatives
Dened Benet
Plans Total
Balance at January 1 $ (65) $ 1 $ 125 $ (6,430) $ (6,369)
Components of Other Comprehensive
Income (Loss):
Before Reclassications 42 (7) (72) 2,302 2,265
Reclassications2 ––(1)526525
Net Other Comprehensive Income (Loss) 42 (7) (73) 2,828 2,790
Balance at December 31 $ (23) $ (6) $ 52 $ (3,602) $ (3,579)
1 All amounts are net of tax.
2 Refer to Note 21, Employee Benets for reclassied components totaling $839 that are included in employee benet costs for the year ending December 31, 2013. Related income taxes for the
same period, totaling $313, are reected in Income Tax Expense on the Consolidated Statement of Income. All other reclassied amounts were insignicant.