Valero 2015 Annual Report Download - page 76

Table of Contents
VALERO ENERGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
for certain money market funds. These provisions are effective for annual reporting periods beginning after December 15, 2015, and
interim periods within those annual periods, with early adoption permitted. These provisions may also be adopted retrospectively in
previously issued financial statements for one or more years with a cumulative-effect adjustment to retained earnings as of the
beginning of the first year restated. The adoption of this guidance effective January 1, 2016 will not affect our financial position or
results of operations, but will result in additional disclosures.
In April 2015, the provisions of ASC Subtopic 835-30, “Interest–Imputation of Interest,” were amended to simplify the presentation of
debt issuance costs. The guidance requires that debt issuance costs related to a note be reported in the balance sheet as a direct
deduction from the face amount of that note, consistent with debt discounts, and that amortization of debt issuance costs be reported as
interest expense. In August 2015, these provisions were further amended with guidance from the Securities and Exchange Commission
staff that they would not object to an entity deferring and presenting debt issuance costs related to line-of-credit arrangements as an
asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of
whether there are any outstanding borrowings on the line-of-credit arrangement. These provisions are to be applied retrospectively and
are effective for annual reporting periods beginning after December 15, 2015, and interim periods within those annual periods, with
early adoption permitted. The adoption of this guidance effective January 1, 2016 will not materially affect our financial position or
results of operations; however, our debt issuance costs associated with issued debt (other than borrowings on our line-of-credit
arrangements) will be reported in the balance sheet as a direct deduction from “debt and capital lease obligations, less current portion”
and excluded from “deferred charges and other assets, net.” As of December 31, 2015, debt issuance costs associated with issued debt
totaled $42 million. Debt issuance costs associated with borrowings on our line-of-credit arrangements will continue to be reported in
the balance sheet as “deferred charges and other assets, net,” and the related amortization will continue to be reported as interest
expense.
Also in April 2015, the provisions of ASC Topic 715, “Compensation–Retirement Benefits” were amended to provide a practical
expedient for the measurement date of an entity’s defined benefit pension or other postretirement plans. For an entity with a fiscal year-
end that does not coincide with a month-end, the guidance provides a practical expedient that allows the entity to measure the defined
benefit plan assets and obligations using the month-end that is closest to the entity’s fiscal year-end. For an entity that has a significant
event in an interim period that calls for a remeasurement, the guidance allows an entity to remeasure the defined benefit plan assets and
obligations using the month-end that is closest to the date of the significant event. These provisions are effective retrospectively for
annual reporting periods beginning after December 15, 2015, and interim periods within those annual periods, with early adoption
permitted. The adoption of this guidance effective January 1, 2016 will not affect our financial position or results of operations.
In May 2015, the provisions of ASC Topic 820, “Fair Value Measurements,” were amended to remove the requirement to categorize
within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient.
The guidance also removes the requirement to make certain disclosures for all investments that are eligible to be measured using the net
asset value per share practical expedient and limits those disclosures to investments for which the entity has elected to measure the fair
value using that practical expedient. These provisions are to be applied retrospectively and are effective for annual reporting periods
beginning after December 15, 2015, and interim periods within those annual periods, with early adoption permitted. The adoption of
this guidance effective January 1, 2016 will not affect our financial position or results of operations, but will result in revised
disclosures.
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