Recent Accounting Pronouncements

9 Months Ended

Sep. 30, 2019

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Measurement of Credit Losses on Financial Instruments

In June 2016, the Financial Accounting Standards Board issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The ASU introduces a new forward-looking approach, based on expected losses, to estimate credit losses on certain types of financial instruments, including trade receivables. The estimate of expected credit losses will require considerations of historical information, current information and reasonable and supportable forecasts. The ASU also expands the disclosure requirements to enable users of financial statements to understand the assumptions, models and methods for estimating expected credit losses. The ASU will be adopted on January 1, 2020. The Company has established a cross-functional implementation team to analyze the effect of the ASU.  The analysis includes identifying pools of receivables, evaluating and assessing estimation methodologies, assessing policy elections, and evaluating its business processes and internal controls to meet the ASU’s accounting, reporting and disclosure requirements.  The Company is currently evaluating the impact the ASU will have on its Consolidated Financial Statements.

Accounting for Leases

On January 1, 2019, the Company adopted and applied Topic 842 resulting in the recognition of right-of-use assets and additional lease liabilities of $81 million as of January 1, 2019, mainly related to operating leases for the Company's real estate portfolio. For additional details regarding the impact to the Company's Consolidated Balance Sheets from adopting this standard, see Note 9 (Leases).