Paychex 2014 Annual Report Download - page 64

PAYCHEX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Recently issued accounting pronouncements: In June 2014, the FASB issued ASU No. 2014-12,
“Compensation — Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of
an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (a consensus
of the FASB Emerging Issues Task Force).” This guidance requires a performance target that affects vesting and
that could be achieved after the requisite service period to be treated as a performance condition. The current
accounting standard for stock-based compensation as it applies to awards with performance conditions should be
applied. This guidance is effective for fiscal years, including interim reporting periods, beginning after
December 15, 2015, and is applicable to the Company’s fiscal year beginning June 1, 2016. The Company is
currently evaluating this guidance, but does not anticipate it will have a material impact to its consolidated
financial statements.
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606).”
This guidance supersedes current guidance on revenue recognition in Topic 605, “Revenue Recognition.” In
addition, there are disclosure requirements related to the nature, amount, timing, and uncertainty of revenue
recognition. This guidance will be effective for annual reporting periods beginning after December 15, 2016,
including interim reporting periods, and will be required to be applied retrospectively. Early application of the
guidance is not permitted. This guidance is applicable to the Company’s fiscal year beginning June 1, 2017. The
Company is currently evaluating this guidance and any potential impact to its consolidated financial statements.
In January 2014, the FASB issued ASU 2014-01, “Investments — Equity Method and Joint Ventures (Topic
323): Accounting for Investments in Qualified Affordable Housing Projects (a consensus of the FASB Emerging
Issues Task Force).” This ASU permits a company to make an accounting policy election to account for
investments in qualified affordable housing projects under a new proportional amortization method. If such an
election is not made, the ASU requires use of the equity or cost method for investments. The ASU is effective for
fiscal years, and interim periods within those years, beginning after December 15, 2014, with early adoption
permitted. The Company currently accounts for its investments in qualified affordable housing projects using the
equity method for investments and does not anticipate that this ASU will have a material effect on its
consolidated financial statements.
In July 2013, the FASB issued ASU 2013-11, “Income Taxes (Topic 740): Presentation of an Unrecognized
Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists
(a consensus of the FASB Emerging Issues Task Force).” This ASU provides explicit guidance regarding the
presentation in the statement of financial position of an unrecognized tax benefit when net operating losses or tax
credit carryforwards exist. It is effective for fiscal years, and interim periods within those years, beginning after
December 15, 2013, with early adoption permitted, and is applicable to the Company’s fiscal year beginning
June 1, 2014. The Company does not anticipate that the adoption of this guidance will have a material effect on
its consolidated financial statements.
Other recent authoritative guidance issued by the FASB (including technical corrections to the FASB
Accounting Standards Codification), the American Institute of Certified Public Accountants, and the Securities
and Exchange Commission (“SEC”) did not, or are not expected to have a material effect on the Company’s
consolidated financial statements.
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