ACCOUNTING AND DISCLOSURE CHANGES

12 Months Ended

Dec. 31, 2016

ACCOUNTING AND DISCLOSURE CHANGES

ACCOUNTING AND DISCLOSURE CHANGES

NOTE 2    ACCOUNTING AND DISCLOSURE CHANGES

Recently Issued Accounting and Disclosure Changes

During 2016, the Financial Accounting Standards Board (FASB) issued rules clarifying the new revenue recognition standard issued in 2014.  Under the new standard, an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.  The new standard also requires more detailed disclosures related to the nature, timing, amount and uncertainty of revenue and cash flows arising from contracts with its customers.  We will adopt these rules when they become effective for interim and annual reporting periods beginning with our first quarter of 2018.  We believe the implementation of these rules will not have a material impact on the timing or net amounts of our recurring commodity sales.  However, we will enhance our disclosures to meet the new requirements.

In August 2016, the FASB issued rules that modify how certain cash receipts and cash payments are presented and classified in the statement of cash flows.  These rules are effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years, with earlier adoption permitted.  We are currently evaluating the impact of these rules on our financial statements.

In June 2016, the FASB issued rules that change how entities will measure credit losses for certain financial assets and other instruments that are not measured at fair value.  These rules are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted.  We are currently evaluating the impact of these rules on our financial statements.

In February 2016, the FASB issued rules requiring lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months and to include qualitative and quantitative disclosures with respect to the amount, timing, and uncertainty of cash flows arising from leases. These rules will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with earlier application permitted.  We are currently evaluating the impact of these rules on our financial statements.

In January 2016, the FASB issued rules that modify how entities measure equity investments and present changes in the fair value of financial liabilities.  Unless the investments qualify for a practicality exception, the new rules require all equity investments to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under the equity method of accounting or those that result in consolidation of the investee).  Entities will have to record changes in instrument-specific credit risk for financial liabilities measured under the fair value option in other comprehensive income.  These new rules become effective for fiscal years beginning after December 15, 2017 with no early adoption permitted.  We do not expect the adoption of these rules to have a significant impact on our financial statements.

Recently Adopted Accounting and Disclosure Changes

In March 2016, the FASB simplified several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. We adopted these rules in 2016 with no material changes reflected in our financial statements.

In November 2015, the FASB issued rules requiring that deferred income tax liabilities and assets be classified as noncurrent in a classified balance sheet.  We adopted the new rule in 2016 and reclassified the current portion of deferred tax assets of $59 million as of December 31, 2015 from other current assets to other assets.

In August 2014, the FASB issued rules relating to management’s responsibility to evaluate and make disclosures, if applicable, regarding the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued.  We adopted these rules in 2016 with no material changes reflected in our financial statements.

In June 2014, the FASB issued rules for employee share-based payment awards in which the terms of the awards provide that a performance target can be achieved after the requisite service period.  A performance target that affects vesting and that could be achieved after the requisite service period will be treated as a performance condition.  We adopted these rules in 2016 with no material changes reflected in our financial statements.