SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2019

Schedule of Adoption of ASU 2016-09

The adoption of ASC 606 had the following impact on the Company’s revenue streams:


Revenues of the Company			Impact of ASC 606
Management fees			No impact - Management fees are recognized as revenue in the period advisory services are rendered.

Performance income - Carried interest allocation			No impact. See discussion below for change in accounting policy.
Performance income - Incentive fees			See discussion below for impact.
Administrative, transaction and other fees			No impact - Administrative, transaction and other fees are recognized as revenue in the period in which the related services are rendered.

The following table presents the adjustments made in connection with the Company's change in accounting principle related to carried interest under ASC 323, Investments-Equity Method and Joint Ventures on the financial statement line items for the periods presented in the consolidated financial statements:


Consolidated Statement of Operations

	For the Year Ended December 31, 2017
	As Previously Reported		Adjustments		As Adjusted

Revenues
Performance income	$	636,674	$	(636,674)	$	—
Carried interest allocation	—		620,454		620,454
Incentive fees	—		16,220		16,220
Principal investment income	—		64,444		64,444
Total revenues	1,415,499		64,444		1,479,943
Other income (expense)
Net realized and unrealized gain on investments	67,034		(58,772)		8,262
Interest and dividend income	12,715		(5,672)		7,043

The Company's change in accounting policy related to carried interest did not impact the Consolidated Statements of Comprehensive Income, Consolidated Statements of Changes in Equity or Consolidated Statements of Cash Flows for the year ended December 31, 2017.

The following tables present the impact of incentive fees on the consolidated financial statements upon the adoption of ASC 606 effective January 1, 2018:

Consolidated Statement of Financial Condition


	As of January 1, 2018
	As adjusted December 31, 2017		Adjustments			As Adjusted for ASC 606 adoption
Investments	$	1,724,571	$	—		$	1,724,571
Other assets	130,341		(22,611)		(1)	107,730
Total assets	8,563,522		(22,611)			8,540,911
Total liabilities	7,103,230		—			7,103,230
Cumulative effect adjustment to equity(2)	—		(22,611)			(22,611)
Total equity	1,460,292		(22,611)			1,437,681
Total liabilities, non-controlling interests and equity	8,563,522		(22,611)			8,540,911

(1)Unrealized incentive fees receivable balance as of December 31, 2017.

(2)See detail below.

Consolidated Statement of Changes in Equity


	Preferred Equity		Shareholders' Capital		Accumulated Other Comprehensive Loss		Non-controlling interest in Ares Operating Group Entities		Non-Controlling Interest in Consolidated Funds		Total Equity
Balance at December 31, 2017	$	298,761	$	279,065	$	(4,208)	$	358,186	$	528,488	$	1,460,292
Cumulative effect of the adoption of ASC 606	—		(10,827)		—		(17,117)		5,333		(22,611)
As adjusted balance at January 1, 2018	$	298,761	$	268,238	$	(4,208)	$	341,069	$	533,821	$	1,437,681

In accordance with the ASC 606 disclosure requirements, the following tables present the adjustments made by the Company to remove the effects of adopting ASC 606 on the consolidated financial statements as of and for the year ended December 31, 2018:


Consolidated Statement of Financial Condition

	As of December 31, 2018
	As Reported		Adjustments		Balances without adoption of ASC 606
Assets
Cash and cash equivalents	$	110,247	$	—	$	110,247
Investments (includes $841,079 of accrued carried interest)	1,326,137		—		1,326,137
Due from affiliates	199,377		—		199,377
Other assets	377,651		40,374		418,025
Total assets	10,154,692		40,373		10,195,065
Commitments and contingencies
Non-controlling interest in Consolidated Funds	503,637		(7,574)		496,063
Non-controlling interest in Ares Operating Group entities	302,780		29,663		332,443
Stockholders' Equity
Additional paid-in-capital	326,007		23,587		349,594
Retained earnings	(29,336)		(5,095)		(34,431)
Accumulated other comprehensive loss, net of tax	(8,524)		(208)		(8,732)
Total stockholders' equity	587,924		18,284		606,208
Total equity	1,394,341		40,373		1,434,714
Total liabilities and equity	10,154,692		40,373		10,195,065


Consolidated Statement of Operations

	For the Year Ended December 31, 2018
	As Reported		Adjustments		Balances without adoption of ASC 606
Revenues
Incentive fees	$	63,380	$	20,997	$	84,377
Total revenues	958,461		20,997		979,458
Expenses
Expenses of Consolidated Funds	53,764		—		53,764
Total expenses	870,362		—		870,362
Other income (expense)
Other income, net	(851)		30		(821)
Total other income	96,242		30		96,272
Income before taxes	184,341		21,027		205,368
Income tax expense	32,202		2,475		34,677
Net income	152,139		18,552		170,691
Less: Net income attributable to non-controlling interests in Consolidated Funds	20,512		(1,921)		18,591
Less: Net income attributable to non-controlling interests in Ares Operating Group entities	74,607		12,808		87,415
Net income attributable to Ares Management Corporation	57,020		7,665		64,685
Less: Series A Preferred Stock dividends paid	21,700		—		21,700
Net income attributable to Ares Management Corporation Class A common stockholders	35,320		7,665		42,985

Consolidated Statement of Comprehensive Income


	For the Year Ended December 31, 2018
	As Reported		Adjustments		Balances without adoption of ASC 606

Net income	$	152,139	$	18,552	$	170,691
Other comprehensive income:
Foreign currency translation adjustments	(13,190)		(470)		(13,660)
Total comprehensive income	138,949		18,082		157,031
Less: Comprehensive income attributable to non-controlling interests in Consolidated Funds	15,575		(1,921)		13,654
Less: Comprehensive income attributable to non-controlling interests in Ares Operating Group entities	70,670		12,546		83,216
Comprehensive income attributable to Ares Management Corporation	$	52,704	$	7,457	$	60,161

Consolidated Statement of Cash Flows


	For the Year Ended December 31, 2018
	As Reported		Adjustments		Balances without adoption of ASC 606

Cash flows from operating activities:
Net income	$	152,139	$	18,552	$	170,691
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Other assets	(66,795)		(20,473)		(87,268)
Change in other liabilities and payables held at Consolidated Funds	137,545		1,921		139,466
Net cash used in operating activities	$	(1,417,058)	$	—	(1,417,058)