SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Jun. 30, 2018

Depreciation and amortization are computed principally using the straight-line method over the following estimated useful lives:



Description	Estimated Useful Lives
Buildings	20-40 years
Marketing furniture and fixtures	3-5 years
Machinery and equipment	2-15 years
Computer equipment and software	2-5 years
Property and equipment under capital leases and leasehold improvements	Lesser of lease term or economic life

Property and equipment, net as of June 30, 2018 and 2017 are presented below:



	June 30, 2018			June 30, 2017
Land, buildings and leasehold improvements	$	671.2		$	646.1
Machinery and equipment	866.3			851.5
Marketing furniture and fixtures	514.2			432.8
Computer equipment and software	699.1			459.0
Construction in progress	230.8			286.1
Property and equipment, gross	2,981.6			2,675.5
Accumulated depreciation and amortization	(1,300.8		)	(1,043.4		)
Property and equipment, net	$	1,680.8		$	1,632.1

Finite-Lived Intangible Assets, Useful Lives

Intangible assets with finite lives are amortized principally using the straight-line method over the following estimated useful lives:



Description	Estimated Useful Lives
License agreements	5-34 years
Customer relationships	2-28 years
Trademarks	2-30 years
Product formulations and technology	3-29 years

Intangible assets subject to amortization are presented below:



	Cost		Accumulated Amortization			Accumulated Impairment			Net
June 30, 2017
License agreements	$	3,148.4	$	(653.3	)	$	—		$	2,495.1
Customer relationships	1,937.3		(375.0		)	(5.5		)	1,556.8
Trademarks	1,001.1		(141.0		)	—			860.1
Product formulations and technology	389.3		(63.0		)	—			326.3
Total	$	6,476.1	$	(1,232.3	)	$	(5.5	)	$	5,238.3
June 30, 2018
License agreements ^(a)(b)	$	3,362.7	$	(792.9	)	$	—		$	2,569.8
Customer relationships ^(a)(b)	1,960.5		(508.7		)	(5.5		)	1,446.3
Trademarks	1,002.1		(185.5		)	(0.4		)	816.2
Product formulations and technology ^(a)	361.2		(95.3		)	—			265.9
Total	$	6,686.5	$	(1,582.4	)	$	(5.9	)	$	5,098.2

^(a) Includes measurement period adjustments in connection with the P&G Beauty Business and ghd acquisitions during fiscal 2018.

^(b)Includes License agreements and Customer relationships of $171.1 and $6.7, respectively resulting from the Burberry Beauty Business acquisition during the fiscal year ended June 30, 2018 (see Note 3—Business Combinations).

Other intangible assets, net as of June 30, 2018 and 2017 are presented below:



	June 30, 2018		June 30, 2017
Indefinite-lived other intangible assets	$	3,186.2	$	3,186.9
Finite-lived other intangible assets, net	5,098.2		5,238.3
Total Other intangible assets, net	$	8,284.4	$	8,425.2

Recently Issued and Not Yet Adopted Accounting Pronouncements



Accounting Standard Update(s)	Topic	Effective Period	Summary
2017-12	Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities	Fiscal 2020. Early adoption is permitted for the Company beginning in fiscal 2019.	The FASB issued authoritative guidance for improvements to accounting for hedging activities. The amendments better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. The Company is evaluating the impact this guidance will have on the Company’s Consolidated Financial Statements and related disclosures.
2017-09	Scope of Modification Accounting	Fiscal 2019. Early adoption is permitted for the Company beginning in fiscal 2018.	The FASB issued authoritative guidance regarding changes to terms or conditions of share-based payment awards that require an entity to apply modification accounting. Under this amendment, an entity should not account for the effects of a modification if all of the following conditions are met: i) the fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the modified and original award (immediately before modification) is the same; ii) the vesting conditions of the modified and original award (immediately before modification) are the same; iii) the classification of the modified and original award (immediately before modification) as an equity or a liability instrument is the same. The Company is currently evaluating the impact this guidance will have on the Company’s Consolidated Financial Statements.
2017-07	Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost	Fiscal 2019. Early adoption is permitted for the Company beginning in fiscal 2018.	The FASB issued authoritative guidance that requires an employer to report the service cost component of an employee benefits plan in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net periodic benefit cost as defined in the current guidance are required to be presented in the income statement separately from the service cost component and outside the subtotal of income from operations, if one is presented. If separate line item or items are not used, the line item or items used in the income statement to present the other components of net periodic benefit cost must be disclosed. The amendment allows only the service cost component to be eligible for capitalization, when applicable. The Company is currently evaluating the impact this guidance will have on the Company’s Consolidated Financial Statements.
2017-04	Simplifying the Test for Goodwill Impairment	Fiscal 2021. Early adoption is permitted for the Company beginning in fiscal 2018.	The FASB issued authoritative guidance that simplifies the subsequent measurement of goodwill by eliminating step two from the goodwill impairment test. Under this amendment, an entity should recognize a goodwill impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The amendment also eliminated the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform step two of the goodwill impairment test. The Company does not expect this guidance to impact the Company’s Consolidated Financial Statements.
2016-16	Intra-Entity Transfers of Assets Other Than Inventory	Fiscal 2019. Early adoption is permitted for the Company beginning in fiscal 2018.	The FASB issued authoritative guidance that amends accounting guidance for intra-entity transfer of assets other than inventory to require the recognition of taxes when the transfer occurs. The Company is currently evaluating the impact this guidance will have on the Company’s Consolidated Financial Statements.



Accounting Standard Update(s)	Topic	Effective Period	Summary
2014-09 2015-14 2016-08 2016-10 2016-12	Revenue from Contracts with Customers	Fiscal 2019 with either retrospective or modified retrospective treatment applied. Early adoption is permitted for the Company beginning in fiscal 2018.	In May 2014, the FASB issued authoritative guidance that implements a common revenue model that will enhance comparability across industries and require enhanced disclosures. The new standard introduces a five step principles based process to determine the timing and amount of revenue ultimately expected to be received. In March 2016, the FASB issued authoritative guidance amending certain portions of this standard to clarify the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued authoritative guidance amending certain portions of this standard to clarify the considerations for identifying performance obligations and to clarify the implementation guidance for revenue recognized from licensing arrangements. In May 2016, the FASB issued authoritative guidance amending certain portions of the standard to narrow the scope over, or to provide practical expedients, for assessing collectibility, presentation of sales taxes, noncash consideration, and completed contracts and contract modifications at transition. The Company adopted the standard on July 1, 2018 using the modified retrospective transition method of adoption. The Company’s evaluation indicated that the adoption impact is expected to be primarily related to the timing of certain accruals associated with customer incentives and potential reclassifications of certain costs between Selling, general and administrative expenses and trade spending activities recorded as a reduction to gross revenue resulting from changes in the accounting treatment of store fixtures under the new standard. If this ASU had been adopted in fiscal 2018, the impact on the Company’s Consolidated Financial Statements would have been a reduction in Net revenues of $25.2. Additionally, the Company expects to provide expanded financial statements disclosures as a result of the adoption of this ASU.
2016-02 2018-10 2018-11	Leases	Fiscal 2020 with early adoption permitted.	The FASB issued authoritative guidance requiring that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in its balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. The Company is currently evaluating the impact the standard will have on the Company’s Consolidated Financial Statements and related disclosures. Lessees and lessors have the option to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach or to initially apply the new leases standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company has selected the transition method provided by the authoritative guidance in ASU 2018-11 and will recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption.