DELPHI 2014 Annual Report Download - page 97

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We expensed the estimated fair value of the VCP over the requisite service vesting periods. Estimating the fair value for
the VCP required us to make assumptions regarding the nature of the payout of the award as well as changes in our share price
during the post-initial public offering period. The awards cliff vested on December 31, 2012, the end of the performance period.
See Note 21. Share-Based Compensation for further disclosures relating to the Company's share-based compensation
arrangements.
Business combinations—We account for our business combinations in accordance with the accounting guidance in
FASB ASC 805, Business Combinations. The purchase price of an acquired business is allocated to its identifiable assets and
liabilities based on estimated fair values. The excess of the purchase price over the amount allocated to the assets and liabilities,
if any, is recorded as goodwill. Determining the fair values of assets acquired and liabilities assumed requires management's
judgment, the utilization of independent appraisal firms and often involves the use of significant estimates and assumptions
with respect to the timing and amount of future cash flows, market rate assumptions, actuarial assumptions, and appropriate
discount rates, among other items.
Recently issued accounting pronouncements—In March 2013, the Financial Accounting Standards Board ("FASB")
issued ASU 2013-05, Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain
Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity. This guidance requires a
reporting entity that ceases to have a controlling financial interest in a business with a foreign entity, other than a sale of in
substance real estate or conveyance of oil and gas mineral rights, to release any related cumulative translation adjustment into
net income. The guidance is effective for fiscal years beginning after December 15, 2013. Delphi adopted this guidance
effective January 1, 2014, and it did not have a significant impact on Delphi's financial statements.
In April 2014, the FASB issued ASU 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of
Components of an Entity. This guidance limits discontinued operations reporting to disposals of components of an entity that
represent strategic shifts that have a major effect on an entity’s operations and financial results. The amendments also require
expanded disclosures for discontinued operations with more information about the assets, liabilities, revenues, and expenses of
discontinued operations. The amendments also require an entity to disclose the pretax profit or loss attributable to a disposal of
an individually significant component of an entity that does not qualify for discontinued operations reporting. The guidance is
effective for disposals (or classifications as held for sale) occurring in fiscal years beginning after December 15, 2014 and
should be applied prospectively. Early adoption is permitted. The adoption of this guidance is not expected to have a significant
impact on Delphi's financial statements.
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. This ASU supersedes most of the
existing guidance on revenue recognition in Accounting Standards Codification ("ASC") Topic 605, Revenue Recognition and
establishes a broad principle that would require an entity to 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. To achieve this principle, an entity identifies the contract with a customer, identifies the separate
performance obligations in the contract, determines the transaction price, allocates the transaction price to the separate
performance obligations and recognizes revenue when each separate performance obligation is satisfied. The guidance is
effective for fiscal years beginning after December 15, 2016 and is to be applied retrospectively at the entity's election either to
each prior reporting period presented or with the cumulative effect of application recognized at the date of initial application.
Early adoption is not permitted. The Company is currently evaluating the impact that the adoption of this guidance will have on
its consolidated financial statements.
In June 2014, the FASB issued ASU 2014-12, Accounting for Share-Based Payments When the Terms of an Award
Provide That a Performance Target Could Be Achieved after the Requisite Service Period. This guidance requires that a
performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance
condition of the award. A reporting entity should apply existing guidance in ASC Topic 718, Compensation-Stock
Compensation, as it relates to such awards. The guidance is effective for fiscal years beginning after December 15, 2015, and
may be applied either prospectively or retrospectively. Early adoption is permitted. The adoption of this guidance is not
expected to have a significant impact on Delphi's financial statements.