SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2018

Schedule of Error Corrections and Prior Period Adjustments

Changes to the consolidated financial statements as a result of the retrospective application of the new accounting standards are summarized as follows:



Summary of Changes to the Consolidated Statements of Income	2017				2016
In millions	As Filed		Updated ¹		As Filed		Updated ¹
Cost of sales	$	44,308	$	43,612	$	37,640	$	37,668
Research and development expenses	$	1,637	$	1,648	$	1,584	$	1,593
Selling, general and administrative expenses	$	2,917	$	2,920	$	2,956	$	2,953
Sundry income (expense) - net	$	877	$	195	$	1,452	$	1,486


1.	Reflects changes resulting from the adoption of ASU 2017-07. See Note 2 for additional information.

Schedule of New Accounting Pronouncements and Changes in Accounting Principles

The effect of adopting Topic 606 did not have a material impact on the consolidated statements of income and the consolidated statements of cash flows.



Summary of Impacts to the Consolidated Balance Sheets	As Reported at Dec 31, 2018		Adjustments			Balance at Dec 31, 2018 Excluding Adoption of Topic 606
In millions	As Reported at Dec 31, 2018		Adjustments			Balance at Dec 31, 2018 Excluding Adoption of Topic 606
Assets
Inventories	$	9,260	$	6		$	9,266
Other current assets	$	852	$	(16	)	$	836
Total current assets	$	25,263	$	(10	)	$	25,253
Deferred income tax assets	$	2,031	$	(26	)	$	2,005
Deferred charges and other assets	$	796	$	(43	)	$	753
Total other assets	$	21,588	$	(69	)	$	21,519
Total Assets	$	77,378	$	(79	)	$	77,299
Liabilities
Accounts payable - Other	$	3,330	$	(10	)	$	3,320
Income taxes payable	$	791	$	2		$	793
Accrued and other current liabilities	$	3,611	$	(15	)	$	3,596
Total current liabilities	$	13,755	$	(23	)	$	13,732
Other noncurrent obligations	$	5,368	$	(140	)	$	5,228
Total other noncurrent liabilities	$	16,400	$	(140	)	$	16,260
Stockholders' Equity
Retained earnings	$	29,808	$	84		$	29,892
The Dow Chemical Company's stockholders' equity	$	26,831	$	84		$	26,915
Total equity	$	27,969	$	84		$	28,053
Total Liabilities and Equity	$	77,378	$	(79	)	$	77,299

The cumulative effect on the Company's January 1, 2018, consolidated balance sheet as a result of adopting these accounting standards is summarized in the following table:



Summary of Impacts to the Consolidated Balance Sheet	Dec 31, 2017			Adjustments due to:								Jan 1, 2018
In millions	As Filed			Topic 606			ASU 2016-01			ASU 2016-16		Updated
Assets
Inventories	$	8,376		$	(11	)	$	—		$	—	$	8,365
Other current assets	$	627		$	29		$	—		$	31	$	687
Total current assets	$	27,244		$	18		$	—		$	31	$	27,293
Deferred income tax assets	$	1,722		$	25		$	—		$	10	$	1,757
Deferred charges and other assets	$	829		$	43		$	—		$	—	$	872
Total other assets	$	22,038		$	68		$	—		$	10	$	22,116
Total Assets	$	79,940		$	86		$	—		$	41	$	80,067
Liabilities
Accounts payable - Other	$	3,062		$	10		$	—		$	—	$	3,072
Income taxes payable	$	694		$	(2	)	$	—		$	—	$	692
Accrued and other current liabilities	$	4,025		$	50		$	—		$	—	$	4,075
Total current liabilities	$	14,377		$	58		$	—		$	—	$	14,435
Other noncurrent obligations	$	5,994		$	117		$	—		$	—	$	6,111
Total other noncurrent liabilities	$	18,789		$	117		$	—		$	—	$	18,906
Stockholders' Equity
Retained earnings	$	28,050		$	(89	)	$	(20	)	$	41	$	27,982
Accumulated other comprehensive loss	$	(8,591	)	$	—		$	20		$	—	$	(8,571	)
The Dow Chemical Company's stockholders' equity	$	25,823		$	(89	)	$	—		$	41	$	25,775
Total equity	$	27,009		$	(89	)	$	—		$	41	$	26,961
Total Liabilities and Equity	$	79,940		$	86		$	—		$	41	$	80,067



Summary of Changes to the Consolidated Statements of Cash Flows	2017						2016
In millions	As Filed			Updated ¹			As Filed			Updated ¹
Operating Activities
Accounts and notes receivable	$	(4,734	)	$	(11,927	)	$	(1,539	)	$	(8,833	)
Proceeds from interests in trade accounts receivable conduits	$	2,269		$	—		$	1,257		$	—
Other assets and liabilities, net	$	(104	)	$	(102	)	$	(717	)	$	(723	)
Cash provided by (used for) operating activities	$	4,502		$	(4,958	)	$	5,600		$	(2,957	)
Investing Activities
Payment into escrow account	$	(130	)	$	—		$	(835	)	$	—
Distribution from escrow account	$	130		$	—		$	835		$	—
Acquisitions of property and businesses, net of cash acquired	$	16		$	47		$	(187	)	$	(187	)
Cash acquired in step acquisition of nonconsolidated affiliate	$	—		$	—		$	1,050		$	1,070
Proceeds from interests in trade accounts receivable conduits	$	—		$	9,462		$	—		$	8,551
Cash provided by (used for) investing activities	$	(1,941	)	$	7,552		$	(3,479	)	$	5,092
Financing Activities
Other financing activities, net	$	(4	)	$	(35	)	$	(2	)	$	(2	)
Cash used for financing activities	$	(3,300	)	$	(3,331	)	$	(4,014	)	$	(4,014	)
Summary
Decrease in cash, cash equivalents and restricted cash	$	(419	)	$	(417	)	$	(1,970	)	$	(1,956	)
Cash, cash equivalents and restricted cash at beginning of period	$	6,607		$	6,624		$	8,577		$	8,580
Cash, cash equivalents and restricted cash at end of period	$	6,188		$	6,207		$	6,607		$	6,624

Reflects the adoption of ASU 2016-15 and ASU 2016-18. In connection with the review and implementation of ASU 2016-15, the Company also changed the value of “Proceeds from interests in trade accounts receivable conduits” due to additional interpretive guidance of the required method for calculating the cash received from beneficial interests in the conduits, including additional guidance from the SEC's Office of the Chief Accountant issued in the third quarter of 2018.