ACCOUNTING POLICIES Change in Accounting Principles (Tables)

9 Months Ended

Sep. 30, 2014

Accounting Changes and Error Corrections [Abstract]

Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block]

Recently Adopted Accounting Standards—In March 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-05, Foreign Currency Matters (Topic 830), clarifying the applicable guidance for the release of the cumulative translation adjustment. ASU 2013-05 was effective for the Company in the period beginning January 1, 2014. The adoption of this update did not have a material impact on the consolidated financial statements.   

In July 2013, the FASB issued ASU No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or Tax Credit Carryforward Exists. ASU 2013-11 requires that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, with certain exceptions. ASU 2013-11 was effective for the Company beginning January 1, 2014 and the adoption of this standard did not have a material impact on the consolidated financial statements.

Recently Issued Accounting Standards—In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). The updated standard will replace most existing revenue recognition guidance in GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. Early adoption is not permitted. The updated standard becomes effective for MJN in the first quarter of 2017. The Company is currently evaluating the effect, if any, that the updated standard will have on its consolidated financial statements and related disclosures.

Change in Accounting Principles—During the first quarter of 2014, the Company changed its accounting principles for the recognition of actuarial gains and losses for all of its defined benefit pension and other post-employment benefit plans and the calculation of expected return on pension plan assets.  Historically, the Company recognized actuarial gains and losses as a component of accumulated other comprehensive loss in its Consolidated Balance Sheets and amortized them into the Consolidated Statements of Earnings over the average future service period of the active employees of these plans to the extent such gains and losses were outside of a corridor.  Starting in the first quarter of 2014, the Company elected to immediately recognize actuarial gains and losses in its Consolidated Statements of Earnings on the basis that it is preferable to accelerate the recognition of such gains and losses into earnings rather than to delay them over time.  Additionally, for purposes of calculating the expected return on pension plan assets, the Company previously used a calculated value for the market-related valuation of pension plan assets. With this change in accounting principle, the Company now uses the actual fair value of pension plan assets. These changes improve transparency in operating results by immediately recognizing the effects of external conditions on plan obligations, investments and assumptions. 

Under these changes in accounting principles, actuarial gains and losses from these plans are recognized upon plan remeasurement in the fourth quarter of each year, or more frequently if a remeasurement occurs. The remaining components of net periodic benefit cost, primarily interest on projected benefit obligation and the expected return on pension plan assets, continue to be recorded on a quarterly basis. Actuarial gains and losses are recognized within Corporate and Other and the remaining components of net periodic benefit costs are recognized in the respective reportable segments.

The Company has applied both of these accounting changes, immediate recognition of actuarial gains or losses and use of actual fair value to calculate expected return on pension plan assets, retrospectively to all periods presented.  The cumulative effect of these changes on additional-paid-in/(distributed)capital and retained earnings on the Company’s opening balance sheet as of January 1, 2013 was a decrease of $96.2 million and an increase of $72.4 million, respectively, with an offsetting adjustment to accumulated other comprehensive loss. These changes had no impact on cash flows for the interim periods presented.  The following tables present the effects of retrospectively applying these accounting changes for the periods presented: 

	Three Months Ended September 30, 2013							Nine Months Ended September 30, 2013
	Previously Reported		Impact of Change			Recast		Previously Reported			Impact of Change			Recast
(in millions except per share data)
Consolidated Statements of Earnings
Cost of Products Sold	$	365.5	$	(3.2	)	$	362.3	$	1,140.8		$	(11.5	)	$	1,129.3
Selling, General and Administrative	222.6		(5.3		)	217.3		666.8			$	(19.0	)	647.8
Research and Development	24.8		(1.0		)	23.8		74.5			$	(3.4	)	71.1
Other (Income)/Expenses – net	31.4		(2.5		)	28.9		62.6			$	(17.7	)	44.9
EARNINGS BEFORE INTEREST AND INCOME TAXES	238.7		12.0			250.7		719.4			$	51.6		771.0
EARNINGS BEFORE INCOME TAXES	226.4		12.0			238.4		680.5			$	51.6		732.1
Provision for Income Taxes	66.4		2.3			68.7		182.4			$	16.6		199.0
NET EARNINGS	160.0		9.7			169.7		498.1			$	35.0		533.1
NET EARNINGS ATTRIBUTABLE TO SHAREHOLDERS	161.6		9.7			171.3		496.3			$	35.0		531.3
Earnings per Share – Basic	$	0.80	$	0.05		$	0.85	$	2.45		$	0.17		$	2.62
Earnings per Share – Diluted	$	0.79	$	0.05		$	0.84	$	2.44		$	0.17		$	2.61
Consolidated Statements of Comprehensive Income
Deferred Gains on Pension and Other Post-employment Benefits	$	—	—			$	—	$	0.8		(0.8		)	$	—
Reclassification Adjustment for Losses Included in Net Earnings	4.5		(4.5		)	—		23.9			(23.9		)	—
Tax Benefit/(Expense)	0.5		(0.5		)	—		(6.6		)	6.6			—

	December 31, 2013
	Previously Reported			Impact of Change			Recast
(in millions)
Consolidated Balance Sheets
Additional Paid-in/(Distributed) Capital	$	(625.3	)	$	(96.2	)	$	(721.5	)
Retained Earnings	1,470.4			(38.1		)	1,432.3
Accumulated Other Comprehensive Loss	(203.5		)	134.3			(69.2		)