Cisco 2014 Annual Report Download - page 92

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• Goodwill and purchased intangible asset impairments
• Income taxes
The actual results experienced by the Company may differ materially from management’s estimates.
(w) New Accounting Updates Recently Adopted
In December 2011, the Financial Accounting Standards Board (FASB) issued an accounting standard update requiring
enhanced disclosures about certain financial instruments and derivative instruments that are offset in the statement of financial
position or that are subject to enforceable master netting arrangements or similar agreements. This accounting standard
became effective for the Company in the first quarter of fiscal 2014. As a result of the application of this accounting standard
update, the Company has provided additional disclosures in Note 11.
In July 2012, the FASB issued an accounting standard update intended to simplify how an entity tests indefinite-lived
intangible assets other than goodwill for impairment by providing entities with an option to perform a qualitative assessment to
determine whether further impairment testing is necessary. This accounting standard update became effective for the Company
beginning in the first quarter of fiscal 2014, and its adoption did not have any impact on the Company’s Consolidated
Financial Statements.
In February 2013, the FASB issued an accounting standard update to require reclassification adjustments from other
comprehensive income to be presented either in the financial statements or in the notes to the financial statements. This
accounting standard became effective for the Company in the first quarter of fiscal 2014. As a result of the application of this
accounting standard update, the Company has provided additional disclosures in Note 15.
(x) Recent Accounting Standards or Updates Not Yet Effective
In March 2013, the FASB issued an accounting standard update requiring an entity to release into net income the entire
amount of a cumulative translation adjustment related to its investment in a foreign entity when as a parent it sells either a part
or all of its investment in the foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets
within the foreign entity. This accounting standard update was effective for the Company beginning in the first quarter of
fiscal 2015. Upon adoption, the application of this accounting standard update did not have any impact to the Company’s
Consolidated Financial Statements.
In July 2013, the FASB issued an accounting standard update that provides explicit guidance on the financial statement
presentation of an unrecognized tax benefit when a net operating loss carryforward or a tax credit carryforward exists. Under
the new standard update, an unrecognized tax benefit, or a portion of an unrecognized tax benefit, is to be presented in the
financial statements as a reduction to a deferred tax asset for a net operating loss carryforward or a tax credit carryforward.
This accounting standard update was effective for the Company beginning in the first quarter of fiscal 2015 and applied
prospectively with early adoption permitted. Upon adoption, the application of this accounting standard update did not have a
material impact to the Company’s Consolidated Financial Statements.
In April 2014, the FASB issued an accounting standard update that changes the criteria for reporting discontinued operations.
This accounting standard update raises the threshold for a disposal transaction to qualify as a discontinued operation and
requires additional disclosures about discontinued operations and disposals of individually significant components that do not
qualify as discontinued operations. This accounting standard update will be effective for the Company beginning in the first
quarter of fiscal 2016. Early adoption is permitted, but only for disposals that have not been reported in financial statements
previously issued. The Company is currently evaluating the impact of this accounting standard update on its Consolidated
Financial Statements.
In May 2014, the FASB issued an accounting standard update related to revenue from contracts with customers, which will
supersede nearly all current U.S. GAAP guidance on this topic and eliminate industry-specific guidance. The underlying
principle is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the
consideration that is expected to be received for those goods or services. This accounting standard update will be effective for
the Company beginning in the first quarter of fiscal 2018. The new revenue standard may be applied retrospectively to each
prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. Early adoption is not
permitted. The Company is currently evaluating the impact of this accounting standard update on its Consolidated Financial
Statements.
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