Mondelez 2014 Annual Report Download - page 63

Table of Contents
Mondelēz International, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
Note 1. Summary of Significant Accounting Policies
Description of Business:
Mondelēz International, Inc. (formerly Kraft Foods Inc.) was incorporated in 2000 in the Commonwealth of Virginia. Mondelēz
International, Inc., through its subsidiaries (collectively “Mondelēz International,” “we,” “us” and “our”), sells food and beverage
products to consumers in approximately 165 countries.
Discontinued Operation:
On October 1, 2012 (the “Distribution Date”), we completed the spin-
off of our former North American grocery business, Kraft Foods
Group, Inc. (“Kraft Foods Group”),
by distributing 100% of the outstanding shares of common stock of Kraft Foods Group to holders
of our Common Stock (the “Spin-Off”).
We retained our global snacks business along with other food and beverage categories. The
divested Kraft Foods Group business is presented as a discontinued operation on the consolidated statements of earnings for all
periods presented. The Kraft Foods Group other comprehensive earnings, changes in equity and cash flows are included within our
consolidated statements of comprehensive earnings, equity and cash flows through October 1, 2012. See Note 2, Divestitures and
Acquisitions,
for additional information.
Principles of Consolidation:
The consolidated financial statements include Mondelēz International, Inc. as well as our wholly owned and majority owned
subsidiaries. We account for investments in which we exercise significant influence (20%-50% ownership interest) under the equity
method of accounting. We use the cost method of accounting for investments in which we have an ownership interest of less than
20% and in which we do not exercise significant influence. The noncontrolling interest represents the non-controlling investors’
interests in the results of subsidiaries that we control and consolidate. All intercompany transactions are eliminated.
Accounting Calendar Change:
In connection with moving toward a common consolidation date across the Company, in the first quarter of 2013, we changed the
consolidation date for our Europe segment, from predominantly the last Saturday of each period to the last calendar day of each
period. The change had a favorable impact of $37 million on net revenues and $6 million on operating income in 2013.
At this time, the majority of our operating subsidiaries report results as of the last calendar day of the period except for our North
America segment. The North America segment reported results as of the last Saturday of the period and beginning in the first
quarter of 2015, reports results as of the last calendar day of the period.
We believe these changes to a common consolidation date are preferable and will improve business planning and financial
reporting by better matching the close dates of the operating subsidiaries and bringing the reporting dates closer to the period-end
date. As the effect to prior-period results was not material, we have not revised the prior-period results.
Use of Estimates:
We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States
of America (“U.S. GAAP”), which require us to make estimates and assumptions that affect a number of amounts in our
consolidated financial statements. Significant accounting policy elections, estimates and assumptions include, among others,
pension and benefit plan assumptions, valuation assumptions of goodwill and intangible assets, useful lives of long-lived assets,
restructuring program liabilities, marketing program accruals, insurance and self-insurance reserves and income taxes. We base
our estimates on historical experience and other assumptions that we believe are reasonable. If actual amounts differ from
estimates, we include the revisions in our consolidated results of operations in the period the actual amounts become known.
Historically, the aggregate differences, if any, between our estimates and actual amounts in any year have not had a material effect
on our consolidated financial statements.
Currency Translation and Highly Inflationary Accounting:
We translate the results of operations of our subsidiaries from multiple currencies using average exchange rates during each period
and translate balance sheet accounts using exchange rates at the end of each period. We record currency translation adjustments
as a component of equity and realized exchange gains and losses on transactions in earnings.
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