New Accounting Guidance (Tables)

3 Months Ended

Mar. 31, 2018

New Accounting Pronouncements

Schedule of New Accounting Guidance

The impact from adopting the new revenue recognition guidance on our consolidated financial statements was as follows:

	Three Months Ended March 31, 2018
(Millions of dollars)	As Reported		Previous Accounting Guidance		Impact from Adopting New Revenue Guidance
Consolidated Statement of Results of Operations
Sales of Machinery, Energy & Transportation	$	12,150	$	12,145	$	5
Cost of goods sold	$	8,566	$	8,560	$	6
Other operating (income) expenses	$	300	$	306	$	(6	)
Operating profit	$	2,108	$	2,103	$	5
Consolidated profit before taxes	$	2,134	$	2,129	$	5
Provision (benefit) for income taxes	$	472	$	471	$	1
Profit (loss) of consolidated companies	$	1,662	$	1,658	$	4
Profit (loss) of consolidated and affiliated companies	$	1,667	$	1,663	$	4
Profit	$	1,665	$	1,661	$	4
Consolidated Statement of Financial Position
Assets
Receivables - trade and other	$	7,894	$	7,907	$	(13	)
Prepaid expenses and other current assets	$	1,856	$	1,568	$	288
Inventories	$	10,947	$	10,956	$	(9	)
Noncurrent deferred and refundable income taxes	$	1,687	$	1,686	$	1
Liabilities
Accrued expenses	$	3,551	$	3,325	$	226
Customer advances	$	1,399	$	1,350	$	49
Shareholders' equity
Profit employed in the business	$	27,929	$	27,937	$	(8	)

The adoption primarily resulted in the reclassification of other components of net periodic benefit cost outside of Operating profit in the Consolidated Statement of Results of Operations.

Consolidated Statement of Results of Operations	Three Months Ended March 31, 2017
(Millions of dollars)	As Revised		Previously Reported			Effect of Change
Cost of goods sold	$	6,801	$	6,758		$	43
Selling, general and administrative expenses	$	1,061	$	1,045		$	16
Research and development expenses	$	425	$	418		$	7
Other operating (income) expenses	$	996	$	1,025		$	(29	)
Total operating costs	$	9,442	$	9,405		$	37
Operating profit	$	380	$	417		$	(37	)
Other income (expense)	$	32	$	(5	)	$	37

The cumulative effect of initially applying the new revenue recognition guidance to our consolidated financial statements on January 1, 2018 was as follows:

Consolidated Statement of Financial Position
(Millions of dollars)	Balance as of December 31, 2017		Cumulative Impact from Adopting New Revenue Guidance			Balance as of January 1, 2018
Assets
Receivables - trade and other	$	7,436	$	(66	)	$	7,370
Prepaid expenses and other current assets	$	1,772	$	327		$	2,099
Inventories	$	10,018	$	4		$	10,022
Property, plant and equipment - net	$	14,155	$	(190	)	$	13,965
Noncurrent deferred and refundable income taxes	$	1,693	$	2		$	1,695
Liabilities
Accrued expenses	$	3,220	$	226		$	3,446
Customer advances	$	1,426	$	46		$	1,472
Other current liabilities	$	1,742	$	(17	)	$	1,725
Other liabilities	$	4,053	$	(166	)	$	3,887
Shareholders' equity
Profit employed in the business	$	26,301	$	(12	)	$	26,289