New Accounting Standards

12 Months Ended

Dec. 31, 2015

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

New Accounting Standards

New Accounting Standards

In May 2014, new revenue recognition guidance was issued. This guidance provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance. The new revenue standard will be effective for us on January 1, 2018. The guidance may be adopted using a full retrospective application or a simplified transition method that allows entities to record a cumulative effect adjustment in retained earnings at the date of initial application. We are currently evaluating this new guidance and the impacts it may have on our financial statements.

In February 2015, new consolidation accounting guidance was issued that amends many aspects of the guidance relating to the analysis and consolidation of variable interest entities. The new guidance  is effective for us, and will be adopted, during the first quarter of 2016; and may be adopted using either a full retrospective or modified retrospective approach. We do not expect the adoption of this guidance to have a material impact on our financial statements.

In January 2016, new guidance was issued relating to the recognition and measurement of financial instruments. The amended guidance will require certain investments in equity securities to be measured at fair value with changes in fair value recognized in net income, and modifies the impairment assessment of certain equity securities. The new guidance is effective for us on January 1, 2018. Certain aspects of the guidance may require a cumulative-effect adjustment and other aspects of the guidance are required to be adopted prospectively. We are currently evaluating this new accounting standard and the impacts it may have on our financial statements.

During the fourth quarter of 2015 we elected to early adopt the following accounting standard updates:

• Balance sheet presentation of deferred income taxes. See Note 4.

• Balance sheet presentation of debt issuance costs: Adopted on a retrospective basis, the new guidance requires debt issuance costs to be presented on the balance sheets as a direct reduction to the related debt liabilities. Prior to the adoption of this guidance we were required to present debt issuance costs as an asset on the balance sheets. As a result of adopting this guidance, our December 31, 2015 Consolidated Balance Sheet includes $28 million of debt issuance costs as a reduction to our long-term debt. Our December 31, 2014 Consolidated Balance Sheet presents $25 million of debt issuance costs as a reduction to long-term debt; this amount was previously presented as a component of non-current other deferred debits. The adoption of this guidance did not impact our results of operations or cash flows. Debt issuance costs continue to be amortized as interest expense. See Note 6.