Summary of Significant Accounting Policies (Tables)

12 Months Ended

Mar. 31, 2019

Schedule of Estimated Useful Lives By Asset

The estimated useful lives of DXC's property and equipment are as follows:



Buildings	Up to 40 years
Computers and related equipment	4 to 5 years
Furniture and other equipment	3 to 15 years
Leasehold improvements	Shorter of lease term or useful life up to 20 years

Schedule of Finite-Lived Intangible Assets

The Company's estimated useful lives for finite-lived intangibles are shown in the table below:



Software	2 to 10 years
Customer related intangibles	Expected customer service life
Acquired contract related intangibles	Contract life and first contract renewal, where applicable

Intangible assets consisted of the following:



	As of March 31, 2019
(in millions)	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Software	$	3,864	$	2,235	$	1,629
Customer related intangible assets	5,389		1,139		4,250
Other intangible assets	85		25		60
Total intangible assets	$	9,338	$	3,399	$	5,939



	As of March 31, 2018
(in millions)	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Software	$	3,484	$	1,918	$	1,566
Customer related intangible assets	5,405		666		4,739
Other intangible assets	90		19		71
Total intangible assets	$	8,979	$	2,603	$	6,376

Schedule of Recently Adopted Accounting Pronouncements and New Accounting Pronouncements

During fiscal 2019, DXC adopted the following Accounting Standards Updates ("ASU") issued by the Financial Accounting Standards Board:



Date Issued and ASU	Date Adopted and Method	Description	Impact
May 2014 ASU 2014-09 “Revenue from Contracts with Customers (Topic 606)"	April 1, 2018 Modified-retrospective	The core principle of this update, and the subsequent amendments, is that revenue is recognized when the transfer of goods or services to customers occurs in an amount that reflects the consideration to which DXC expects to be entitled in exchange for those goods or services. The guidance also addresses the timing of recognition of certain costs incurred to obtain or fulfill a customer contract. Further, it requires the disclosure of sufficient information to enable readers of DXC’s financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, and information regarding significant judgments and changes in judgments made. This update provides two methods of adoption: full retrospective and modified retrospective. Under the full retrospective method, the standard would be applied to all periods presented with previously disclosed periods restated under the new guidance. Under the modified retrospective method, prior periods would not be restated but rather a cumulative catch-up adjustment would be recorded on the adoption date.	The Company adopted this standard using the modified retrospective method. The Company has applied the standard to only those contracts that were not completed at the adoption date. The adoption resulted in the following impacts. The Company recorded a net increase to opening retained earnings, net of income taxes, of approximately $114 million as of April 1, 2018 due to the cumulative impact of adopting Topic 606, with the impact primarily related to the capitalization of certain sales commissions of approximately $158 million offset by a reduction in income tax assets and liabilities of approximately $40 million. In addition, the Company has recorded a reduction in contract liabilities of approximately $381 million and other current assets and other assets of $385 million, primarily related to the net down of certain long-term contract asset and contract liability balances and the change in timing of revenue and costs recognized related to the Company's software contracts. Refer to Note 19 - “Revenue” for further discussion of the impact of adoption and other required disclosures.
March 2017 ASU 2017-07 “Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost"	April 1, 2018 Retrospective	This update is intended to improve the presentation of net periodic pension cost and net periodic post-retirement benefit cost in an entity's financial statements by requiring the service cost component be disaggregated from other components of net benefit costs and presented in the same line item or items as other compensation costs for the employees. Additionally, only the service cost component of net benefit cost is eligible for capitalization when applicable. This update must be applied retrospectively.	DXC reclassified non-service cost components of net periodic pension (income) expense from "costs of services" and "selling, general and administrative" to "other income, net" in the statements of operations for the twelve months ended March 31, 2018 and March 31, 2017, respectively, as previously reported within Exhibit 99.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on August 16, 2018.



August 2016 ASU 2016-15 “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments"	April 1, 2018 Retrospective	This update addressed eight cash flow classification issues that have created diversity in practice, providing definitive guidance on classification of certain cash receipts and payments. This update must be adopted retrospectively for all periods presented but may be applied prospectively if retrospective application would be impracticable	ASU 2016-15 requires the company to classify cash receipts related to its beneficial interests in securitization transactions, which is the deferred purchase price (the “DPP”) recorded in connection with the Company's Receivables Securitization Facility, within investing activities in its statements of cash flows. The Company adopted ASU 2016-15 effective April 1, 2018, and retrospectively adjusted prior fiscal periods, using each month’s transactional activity as the unit of account in determining the portions of transferred trade receivables as operating activities and investing activities. As disclosed in prior quarters the Company was evaluating the unit of account used in implementing ASU 2016-15. During the third quarter of fiscal 2019, the Company completed its evaluation and determined that it was necessary to change the unit of account from each month's transactional activity to each day's transactional activity. The Company reflected this change on a retrospective basis as further discussed in Note 22 - "Reconciliation of Previously Reported Amounts to Recast Financial Statements. See Note 5 - "Receivables" for more information about the Receivables Securitization Facility.
November 2016 ASU 2016-18 “Statement of Cash Flows (Topic 230): Restricted Cash (A Consensus of the FASB Emerging Issues Task Force")	April 1, 2018 Retrospective	This update requires that amounts described as restricted cash or restricted cash equivalents must be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This update must be applied retrospectively.	DXC reclassified restricted cash to beginning-of-period and end-of-period cash and cash equivalents on the statement of cash flows. $68 million of restricted cash is included within assets of discontinued operations in the Company's balance sheet as of March 31, 2018.
August 2017 ASU 2017-12 "Derivatives & Hedging (Topic 815)"	Early adopted January 1, 2019 Modified-retrospective	This update is intended to improve the financial reporting of hedge relationships to better portray the economic results of an entity's risk management activities in its financial statements, by revising and expanding items eligible for hedge accounting, simplifying hedge effectiveness testing and changing the timing of recognition and presentation of certain hedge items. Early adoption is permitted.	The adoption of this standard had no material impact on DXC's financial statements.

The following ASUs were recently issued but have not yet been adopted by DXC:



Date Issued and ASU	DXC Effective Date	Description	Impact
February 2016 ASU 2016-02 "Leases (Topic 842)"	Fiscal 2020	This update is intended to increase transparency and comparability among organizations by recognizing virtually all lease assets and lease liabilities on the balance sheet and disclosing key information about lease arrangements. Early adoption of this update is permitted. This update must be adopted using a modified retrospective transition at the beginning of the earliest period presented or at the adoption date recognizing a cumulative adjustment to the opening balance of retained earnings in the period of adoption. This update provides for certain practical expedients.	DXC will adopt this update on April 1, 2019 utilizing the simplified transition method allowing the Company to not restate comparative periods and apply Topic 842 beginning on April 1, 2019. The Company expects that the cumulative adjustment to the opening balance of retained earnings will be immaterial. In preparation for the adoption of this update, the Company has implemented changes in its systems, including the implementation of new lease accounting software, internal controls, business processes, and accounting policies related to both the implementation of, and ongoing compliance with, the new guidance. Although the Company is still finalizing its evaluation of the update and the quantification of its impact, the Company expects its adoption will result in an increase in assets and liabilities on the balance sheets of approximately $1.6 billion to $1.8 billion due to the recording of right-of-use assets and lease liabilities for lease obligations that were historically classified as operating leases. The company does not expect the guidance will have a material impact on the statements of operations or statements of cash flows. DXC expects to elect the practical expedient package permitted under Topic 842, which among other things, permits the Company not to reassess historical conclusions related to contracts that contain leases, lease classification and initial direct costs for leases that commenced prior to the adoption date. DXC expects to elect the lessee component election, allowing the Company to account for lease and non-lease components as a single lease component. Also, DXC expects to make an accounting policy election to keep leases with an initial term of 12 months or less that do not contain a ‘reasonably certain’ purchase option off the balance sheets.
February 2018 ASU 2018-02 - "Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income"	Fiscal 2020	This update provides an option to reclassify stranded tax effects within AOCI to retained earnings in each period in which the effect (or portion thereof) of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recorded.	The Company will adopt this update in the first quarter of fiscal 2020 and expects to not elect to reclassify any stranded tax effects within AOCI to retained earnings.



June 2016 ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”	Fiscal 2021	This update is intended to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in this update replace the existing incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. This update must be adopted using a prospective transition approach for debt securities for which an other-than-temporary impairment has been recognized before the effective date	DXC is currently evaluating its trade receivables and financial arrangements for the potential impact this update may have on its financial statements in future reporting periods.

The impact of adoption of ASC 606 on the selected captions of the Company's statements of operations and balance sheets was as follows:



Statement of Operations (Selected Captions)
	Twelve Months Ended March 31, 2019
(in millions)	As Reported			Amounts Without Adoption of ASC 606			Effect of Change Higher/(Lower)
Revenues	$	20,753		$	20,723		$	30
Costs of services	$	14,946		$	14,944		$	2
Selling, general and administrative	$	1,959		$	2,032		$	(73	)
Interest income	$	(128	)	$	(141	)	$	(13	)
Income tax expense	$	288		$	266		$	22
Net income attributable to DXC common stockholders	$	1,257		$	1,191		$	66



Balance Sheet (Selected Captions)
	As of March 31, 2019
(in millions)	As Reported			Amounts Without Adoption of ASC 606			Effect of Change Higher/(Lower)
Assets:
Receivables and contract assets, net of allowance for doubtful accounts	$	5,181		$	5,199		$	(18	)
Other current assets	$	359		$	411		$	(52	)
Deferred income taxes, net	$	355		$	376		$	(21	)
Other assets	$	3,429		$	3,451		$	(22	)

Liabilities:
Accrued expenses and other current liabilities	$	3,355		$	3,356		$	(1	)
Deferred revenue and advance contract payments	$	1,630		$	1,717		$	(87	)
Income taxes payable	$	208		$	206		$	2
Non-current deferred revenue	$	256		$	491		$	(235	)
Non-current income tax liabilities and deferred tax liabilities	$	1,184		$	1,148		$	36

Equity:
Retained earnings	$	478		$	301		$	177
Accumulated other comprehensive loss	$	(244	)	$	(239	)	$	(5	)