Summary of Recent Accounting Pronouncements

12 Months Ended

Dec. 31, 2015

Accounting Policies [Abstract]

Summary of Recent Accounting Pronouncements

2. Summary of Recent Accounting Pronouncements

Consolidation

InFebruary 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-02, “Consolidation (Topic 810): Amendments to the Consolidation Analysis”. The new standard is intended to improve targeted areas of the consolidation guidance for legal entities such as limited partnerships, limited liability corporations, and securitization structures. The amendments in the ASU affect the consolidation evaluation for reporting organizations. In addition, the amendments in this ASU simplify and improve current GAAP by reducing the number of consolidation models. This guidance is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2015; however, early adoption is permitted. Nielsen is currently assessing the impact of the adoption of this ASU will have on the Company’s consolidated financial statements.

Debt Issuance Costs

In April 2015, the FASB issued an ASU, “Simplifying the Presentation of Debt Issuance Costs”. The new standard changes the presentation of debt issuance costs in financial statements. Under the ASU, an entity presents such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of the costs is reported as interest expense. This guidance will be effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2015; however, early adoption is permitted.  The Company elected to early adopt this ASU and retrospectively adjusted prior period amounts to conform to the current year presentation. The retrospective application of this ASU resulted in a reclassification of $8 million from prepaid expenses and other current assets and $42 million from other non-current assets to current portion of long-term debt, capital lease obligations and short-term borrowings and long-term debt and capital lease obligations in the consolidated balance sheet for the year ended December 31, 2014.

Income Taxes

In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes, requiring all deferred tax assets and liabilities, and any related valuation allowance, to be classified as noncurrent on the balance sheet. The classification change for all deferred taxes as noncurrent simplifies entities’ processes as it eliminates the need to separately identify the net current and net noncurrent deferred tax asset or liability in each jurisdiction and allocate valuation allowances. Nielsen elected to prospectively adopt the accounting standard as of December 31, 2015, resulting in a reclassification of Nielsen’s current deferred tax assets and liabilities to the non-current deferred tax assets and liabilities in Nielsen’s consolidated balance sheet.  Prior periods in Nielsen’s consolidated financial statements were not retrospectively adjusted.

Revenue Recognition

In May 2014, the FASB issued an ASU, “Revenue from Contracts with Customers”.  The new revenue recognition standard provides a five step analysis of transactions to determine when and how revenue is recognized. The new model will require revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services and shall be applied retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption.  The FASB has approved a one year deferral of this standard and is now effective for annual periods beginning after December 15, 2017. Nielsen is currently assessing the impact of the adoption of this ASU will have on our consolidated financial statements.