Hertz 2015 Annual Report Download - page 98

Table of Contents
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Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could be Achieved after the Requisite
Service Period
In June 2014, the FASB issued guidance that requires that a performance target in a share-based payment award that affects vesting and that can
be achieved after the requisite service period is completed is to be accounted for as a performance condition; therefore, compensation cost should
be recognized in the period in which it becomes probable that the performance target will be achieved, and the amount of compensation cost
recognized should be based on the portion of the service period fulfilled. The guidance is effective either prospectively or retrospectively for annual
periods beginning after December 15, 2015 and interim periods within those annual periods. The Company has assessed the potential impacts
from future adoption of this guidance and has determined that there will be no impact on its financial position, results of operations and cash flows.
Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items
In January 2015, the FASB issued guidance that eliminates the concept of an event or transaction that is unusual in nature and occurs
infrequently being treated as an extraordinary item. The guidance is effective for annual periods beginning after December 15, 2015 and interim
periods within those annual periods. The Company has assessed the potential impacts from future adoption of this guidance and has determined
that there will be no impact on its financial position, results of operations and cash flows.
Amendments to the Consolidation Analysis
In February 2015, the FASB issued guidance that changes the analysis that a reporting entity must perform to determine whether it should
consolidate certain types of legal entities. The new guidance may be applied using a full or modified retrospective approach. The guidance is
effective for annual periods beginning after December 15, 2015 and interim periods within those annual periods. The Company has assessed the
potential impacts from future adoption of this guidance and has determined that there will be no impact on its financial position, results of
operations and cash flows.
Simplifying the Presentation of Debt Issuance Costs
In April 2015, the FASB issued guidance requiring debt issuance costs related to a recognized debt liability be presented in the balance sheet as a
direct deduction from the carrying amount of that debt liability. In August 2015, the FASB issued guidance clarifying that debt issuance costs
related to line-of-credit and other revolving debt arrangements may be deferred and presented as an asset. The guidance is effective
retrospectively for annual periods beginning after December 15, 2015 and interim periods within those annual periods. This guidance will require the
Company to reclassify its debt issuance costs associated with its debt other than line-of-credit and other revolving debt arrangements on its
consolidated balance sheets from “prepaid expenses and other assets” to “debt” on a retrospective basis. The Company is in the process of
assessing the potential impacts of adopting this guidance on its financial condition. The new guidance will not affect the Company’s results of
operations or cash flows.
Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement
In April 2015, the FASB issued guidance for customers about whether a cloud computing arrangement includes a software license. If a cloud
computing arrangement includes a software license, then the customer should account for the software license element of the arrangement
consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer
should account for the arrangement as a service contract. This new guidance is effective for annual periods, including interim periods within those
annual periods, beginning after December 15, 2015. The Company is in the process of determining the method of adoption and assessing the
overall impacts of adopting this guidance on its financial position, results of operations and cash flows.
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The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,
except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.