Summary of Significant Accounting Policies (Tables) - Topic 606

6 Months Ended

Mar. 31, 2019

Schedule of Cumulative Effect of Changes to Opening Balance Sheet from Adoption of ASC 606

The following table provides the cumulative effect of the changes made to the opening balance sheet, as of October 1, 2018, from the adoption of ASC 606 and which primarily relates to the accrual of licensing revenue in the period of sale or usage.

	September 30,			Impact of			October 1,
	2018			Adoption			2018
	(in millions)
Assets
Accounts receivable, net	$	447		$	257		$	704
Total current assets		1,176			257			1,433
Other assets		78			15			93
Total assets	$	5,344		$	272		$	5,616
Liabilities and Equity
Accrued royalties		1,396			79			1,475
Accrued liabilities		423			(1	)		422
Deferred revenue		208			(27	)		181
Other current liabilities		34			33			67
Total current liabilities		2,373			84			2,457
Deferred tax liabilities, net		165			37			202
Other noncurrent liabilities		307			1			308
Total liabilities		5,664			122			5,786
Equity:
Accumulated Deficit		(1,272	)		139			(1,133	)
Non-controlling interest		14			11			25
Total equity		(320	)		150			(170	)
Total liabilities and equity	$	5,344		$	272		$	5,616

Schedule of Impact of Adoption on Consolidated Statement of Operations, Balance Sheet and Statement of Cash Flows

The disclosure of the impact of adoption on the consolidated statement of operations for the three and six months ended March 31, 2019, the consolidated balance sheet as of March 31, 2019, and the consolidated statement of cash flows for the six months ended March 31, 2019 are as follows (in millions):

	Three Months Ended									Six Months Ended
	March 31, 2019									March 31, 2019
	As Reported			Balances without adoption of ASC 606			Effect of Change			As Reported			Balances without adoption of ASC 606			Effect of Change
	(in millions)									(in millions)
Revenues	$	1,090		$	1,080		$	10		$	2,293		$	2,263		$	30
Cost and expenses:
Cost of revenue		(559	)		(545	)		(14	)		(1,185	)		(1,169	)		(16	)
Operating income		122			126			(4	)		269			255			14
Income before income taxes		115			119			(4	)		251			237			14
Income tax expense		(48	)		(50	)		2			(98	)		(92	)		(6	)
Net income		67			69			(2	)		153			145			8
Less: Income attributable to    noncontrolling interest		—			(1	)		1			—			(1	)		1
Net income attributable to Warner Music    Group Corp.	$	67		$	68		$	(1	)	$	153		$	144		$	9

	March 31, 2019
	As Reported			Balances without adoption of ASC 606			Effect of Change
	(in millions)
Assets
Accounts receivable, net	$	781		$	497		$	284
Total current assets		1,524			1,240			284
Other assets		150			135			15
Deferred tax assets, net		7			7			—
Total assets	$	5,902		$	5,603		$	299
Liabilities and Equity
Accounts Payable		245			245			—
Accrued royalties		1,509			1,414			95
Accrued liabilities		409			410			(1	)
Deferred revenue		170			198			(28	)
Other current liabilities		153			123			30
Total current liabilities		2,518			2,422			96
Deferred tax liabilities, net		230			188			42
Other noncurrent liabilities		284			280			4
Total liabilities		6,022			5,880			142
Equity:
Accumulated Deficit		(1,043	)		(1,190	)		147
Non-controlling interest		20			10			10
Total equity		(120	)		(277	)		157
Total liabilities and equity	$	5,902		$	5,603		$	299

	March 31, 2019
	As Reported			Balances without adoption of ASC 606			Effect of Change
	(in millions)
Cash flows from operating activities
Net income	$	153		$	145		$	8
Deferred income taxes		27			22			5
Changes in operating assets and liabilities:
Accounts receivable		(90	)		(63	)		(27	)
Accounts payable and accrued liabilities		(100	)		(103	)		3
Royalty payables		46			30			16
Deferred revenues		(19	)		(17	)		(2	)
Other balance sheet changes		28			31			(3	)
Net cash provided by operating activities		99			99			—
Effect of exchange rate changes on cash and equivalents		(1	)		(1	)		—
Net decrease in cash and equivalents		(44	)		(44	)		—
Cash and equivalents at beginning of period		514			514			—
Cash and equivalents at end of period	$	470		$	470		$	—