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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
9 Months Ended
Mar. 31, 2015
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The unaudited interim Condensed Consolidated Financial Statements are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and include consolidated domestic and international subsidiaries. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. Accordingly, these unaudited interim Condensed Consolidated Financial Statements and accompanying footnotes should be read in conjunction with the Company’s Consolidated Financial Statements as of and for the year ended June 30, 2014. In the opinion of management, all adjustments, of a normal recurring nature, considered necessary for a fair presentation have been included in the Condensed Consolidated Financial Statements. The results of operations for the three and nine months ended March 31, 2015 are not necessarily indicative of the results of operations to be expected for the full fiscal year ending June 30, 2015.
Related Parties
During the first quarter of fiscal 2015, JAB Holdings B.V. (“JAB”) transferred all of its Coty Inc. Class B shares to JAB Cosmetics B.V. (“JABC”). As of March 31, 2015, the Company is a majority-owned subsidiary of JABC. Lucresca SE, Agnaten SE and JAB indirectly control JABC and the shares of the Company held by JABC.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the period reported. Significant accounting policies that contain subjective management estimates and assumptions include those related to revenue recognition, the market value of inventory, the fair value of acquired assets and liabilities associated with acquisitions, the fair value of share-based compensation, pension and other post-employment benefit costs, the fair value of our reporting units, and the assessment of goodwill, other intangible assets and long-lived assets for impairment, income taxes, derivatives and redeemable noncontrolling interests when calculating the impact on Earnings Per Share (“EPS”). Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and makes adjustments when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from those estimates and assumptions. Significant changes, if any, in those estimates and assumptions resulting from continuing changes in the economic environment will be reflected in the Consolidated Financial Statements in future periods.
Tax Information
The effective income tax rate for the three months ended March 31, 2015 and 2014 was 15.8% and 14.1%, respectively. The variation in the effective tax rate related to the three months ended March 31, 2015 was primarily due to the negative impact of a partial valuation allowance established for excess U.S. net deferred tax assets offset by the positive impacts of the decrease in the accrual for unrecognized tax benefits. The variation in the effective tax rate related to the three months ended March 31, 2014 was primarily due to the negative impact of asset impairment charges with minimal tax benefits and the positive effects of the reversal of certain previously unrecognized tax benefits approximating 38.1

The effective income tax rate for the nine months ended March 31, 2015 and 2014 was 14.5% and (328.3)%, respectively. The variation in the effective tax rates related to the nine months period ended March 31, 2015 was primarily due to the positive impacts of the  decrease in the accrual for unrecognized tax benefits, partially offset by the negative impact of a partial valuation allowance established for excess U.S. net deferred tax assets.  The variation in the effective tax rates related to the nine months period ended March 31, 2014 was primarily due to the negative impact  related to  asset impairment charges with minimal tax benefits. 
The effective income tax rates vary from the U.S. federal statutory rate of 35% due to the effect of (i) jurisdictions with different statutory rates, (ii) adjustments to the Company’s unrealized tax benefits (“UTBs”) and accrued interest, (iii) non-deductible expenses and (iv) valuation allowance changes.
As of March 31, 2015 and June 30, 2014, the gross amount of UTBs was $318.5 and $400.5, respectively. As of March 31, 2015, the total amount of UTBs that, if recognized, would impact the effective income tax rate is $77.1. As of March 31, 2015 and June 30, 2014, the liability associated with UTBs, including accrued interest and penalties, was $90.3 and $159.4, respectively, which was recorded in Income and other taxes payable and Other non-current liabilities in the Condensed Consolidated Balance Sheets. The total interest and penalties recorded in the Condensed Consolidated Statements of Operations related to UTBs for the three months ended March 31, 2015 and 2014 was $0.7 and $(3.8), and $(2.5) and $(1.4) for the nine months ended March 31, 2015 and 2014, respectively. The total gross accrued interest and penalties recorded in the Condensed Consolidated Balance Sheets as of March 31, 2015 and June 30, 2014 was $18.8 and $25.5, respectively. On the basis of the information available as of March 31, 2015, it is reasonably possible that a decrease of up to $3.1 in UTBs may occur within 12 months as a result of projected resolutions of global tax examinations and a potential lapse of the applicable statutes of limitations.
Recently Issued Accounting Pronouncements
In February 2015, the FASB issued authoritative guidance on a revised consolidation model for all reporting entities to use in evaluating whether they should consolidate certain legal entities. All legal entities will be subject to reevaluation under this revised consolidation model. The revised consolidation model, among other things, (i) modifies the evaluation of whether limited partnerships and similar legal entities are VIEs or voting interest entities, (ii) eliminates the presumption that a general partner should consolidate a limited partnership, and (iii) modifies the consolidation analysis of reporting entities that are involved with VIEs through fee arrangements and related party relationships. This amendment will be effective for the Company’s interim and annual financial statements for fiscal 2017 using either a modified retrospective, or a retrospective approach. The Company is evaluating the impact this amended guidance will have on the Company’s Condensed Consolidated Financial statements.
In April 2015, the FASB issued authoritative guidance on the treatment of debt issuance costs. The guidance requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This amendment will be effective for the Company’s interim and annual financial statements for fiscal 2017 using a retrospective approach. The Company is evaluating the impact this amendment will have on the Company’s Condensed Consolidated Financial statements.