Nucor 2015 Annual Report Download - page 43

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impairments and losses on assets in the consolidated statements of earnings. The assumptions that most significantly affect the fair value
determination include projected revenues, metal margins and the discount rate. Steel market conditions in Europe have continued to be
challenging through the fourth quarter of 2015, and, therefore, it is reasonably possible that material deviation of future performance from
the estimates used in our most recent valuation could result in further impairment of our investment in Duferdofin Nucor. We will continue
to monitor for potential triggering events that could affect the carrying value of our investment in Duferdofin Nucor as a result of future
market conditions and any changes in business strategy.
ENVIRONMENTAL REMEDIATION
We are subject to environmental laws and regulations established by federal, state and local authorities, and we make provisions
for the estimated costs related to compliance. Undiscounted remediation liabilities are accrued based on estimates of known
environmental exposures. The accruals are reviewed periodically and, as investigations and remediation proceed, adjustments are
made as we believe are necessary. Our measurement of environmental liabilities is based on currently available facts, present laws
and regulations and current technology.
INCOME TAXES
We utilize the liability method of accounting for income taxes. Under the liability method, deferred taxes are determined based on the
temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to be in effect
during the years in which the basis differences reverse. A valuation allowance is recorded when it is more likely than not that some of
the deferred tax assets will not be realized. We recognize the effect of income tax positions only if those positions are more likely than
not of being sustained. Potential accrued interest and penalties related to unrecognized tax benefits within operations are recognized
as a component of interest expense and other expenses.
RECENT ACCOUNTING PRONOUNCEMENTS
See Note 2 to our consolidated financial statements for a discussion of new accounting pronouncements adopted by Nucor during 2015
and the expected financial impact of accounting pronouncements recently issued or proposed but not yet required to be adopted.
RECLASSIFICATIONS
During the first six months of 2015, the Company performed certain internal reorganization activities. In connection with this process,
the financial information utilized by the Chief Operating Decision Maker when assessing segment performance and making resource
allocations was adjusted in a way that affected how certain assets are grouped. This resulted in certain assets being reclassified
between the steel mills segment, steel products segment, raw materials segment and corporate/eliminations in the segment footnote
in order to align with the approach management uses to assess the performance of those segments. The segment data for the
comparable periods has also been reclassified in order to conform to the current period presentation. These reclassifications did not
have any impact on the consolidated asset balances nor did they impact any segment income statement amounts. The steel mills,
steel products and raw materials segments are consistent with the way Nucor manages its business, which is primarily based upon
the similarity of the types of products produced and sold by each segment.