Sprouts Farmers Market 2014 Annual Report Download - page 88

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Comprehensive Income
Comprehensive income equals net income for all periods presented.
Recently Issued Accounting Pronouncements
In February 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards
Update (“ASU”) No. 2013-04, “Obligations Resulting from Joint and Several Liability Arrangements for
Which the Total Amount of the Obligation Is Fixed at the Reporting Date (a consensus of the FASB
Emerging Issues Task Force),” which amends Accounting Standards Codification (“ASC”) 405, “Liabilities.”
The amendments provide guidance on the recognition, measurement, and disclosure of obligations
resulting from joint and several liability arrangements, including debt arrangements, other contractual
obligations, and settled litigation and judicial rulings, for which the total amount of the obligation is fixed at
the reporting date. The amendments are effective for fiscal years, and interim periods within those years,
beginning after December 15, 2013 and should be applied retrospectively. The provisions were effective
from the Company’s first quarter of 2014. The adoption of this guidance did not have a material effect on
the Company’s consolidated financial statements.
In July 2013, the FASB issued ASU No. 2013-11, “Presentation of an Unrecognized Tax Benefit When
a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists,” which
amends ASC 740, “Income Taxes.” ASU No. 2013-11 requires that unrecognized tax benefits be classified
as an offset to deferred tax assets to the extent of any net operating loss carryforwards, similar tax loss
carryforwards, or tax credit carryforwards are available at the reporting date in the applicable tax
jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position.
An exception would apply if the tax law of the tax jurisdiction does not require the Company to use, and it
does not intend to use, the deferred tax asset for such purpose. This guidance is effective for reporting
periods beginning after December 15, 2013. The provisions were effective from the Company’s first quarter
of 2014. The adoption of this guidance did not have a material effect on the Company’s consolidated
financial statements.
In April 2014, the FASB issued ASU No. 2014-08, “Presentation of Financial Statements (Topic 205)
and Property, Plant and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of
Disposals of Components of an Entity.” ASU No. 2014-08 amends previous guidance related to the criteria
for reporting a disposal as a discontinued operation by elevating the threshold for qualification for
discontinued operations treatment to a disposal that represents a strategic shift that has a major effect on
an organization’s operations or financial results. This guidance also requires expanded disclosures for
transactions that qualify as a discontinued operation and requires disclosure of individually significant
components that are disposed of or held for sale but do not qualify for discontinued operations reporting.
This guidance is effective prospectively for all disposals or components initially classified as held for sale in
periods beginning on or after December 15, 2014, with early adoption permitted. The Company does not
expect the adoption of this guidance to have a material effect on its consolidated financial statements.
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers.” ASU
No. 2014-09 provides guidance for revenue recognition. The standard’s core principle is that a company
will recognize revenue when it transfers promised goods or services to customers in an amount that
reflects the consideration to which the company expects to be entitled in exchange for those goods or
services. In doing so, companies will need to use more judgment and make more estimates than under
current guidance. These may include identifying performance obligations in the contract, and estimating
the amount of variable consideration to include in the transaction price attributable to each separate
performance obligation. This guidance will be effective for the Company for its fiscal year 2017. The
Company is currently evaluating the potential impact of this guidance.
In June 2014, the FASB issued ASU Update No. 2014-12, “Compensation—Stock Compensation (Topic
718): Accounting for Share-Based Payments When the Terms of an Award Provide that a Performance
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