XML 172 R9.htm IDEA: XBRL DOCUMENT v3.20.1
New accounting pronouncements
12 Months Ended
Feb. 01, 2020
Accounting Policies [Abstract]  
New accounting pronouncements New accounting pronouncements
The following section provides a description of new accounting pronouncements ("Accounting Standard Update" or "ASU") issued by the Financial Accounting Standards Board ("FASB") that are applicable to the Company.
New accounting pronouncements recently adopted
Leases
In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” The new guidance primarily impacts lessee accounting by requiring the recognition of a right-of-use asset and a corresponding lease liability on the balance sheet for long-term lease agreements. The lease liability will be equal to the present value of all reasonably certain remaining lease payments. The right-of-use asset will be based on the liability, subject to adjustment for initial direct costs. Lease agreements that are 12 months or less are permitted to be excluded from the balance sheet. In general, leases will be amortized on a straight-line basis with the exception of finance lease agreements. Signet adopted ASU 2016-02 and related updates effective February 3, 2019 using the additional transition method provided for in ASU No. 2018-11, “Leases (Topic 842): Targeted Improvements,” which permitted the Company as of the effective date of ASU 2016-02 to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The impact of this approach was deemed immaterial upon adoption of ASU 2016-02. As part of the adoption of ASU 2016-02, the Company utilized the practical expedient relief package, as well as the short-term leases and portfolio approach practical expedients.
The effects of the changes made to the Company’s condensed consolidated balance sheet as of February 3, 2019 for the adoption of ASC 842 were as follows:
(in millions)
 
February 2, 2019
 
Adjustments due to ASC 842
 
February 3, 2019
Current assets:
 
 
 
 
 
 
Other current assets
 
$
244.0

 
$
(8.8
)
 
$
235.2

Non-current assets:
 
 
 
 
 
 
Operating lease right-of-use assets
 

 
1,927.2

 
1,927.2

Current liabilities:
 
 
 
 
 
 
Accrued expenses and other current liabilities
 
502.8

 
(32.9
)
 
469.9

Operating lease liabilities
 

 
376.5

 
376.5

Non-current liabilities:
 
 
 
 
 
 
Operating lease liabilities
 

 
1,676.9

 
1,676.9

Other liabilities
 
224.1

 
(102.1
)
 
122.0


See additional disclosures related to leases within Note 17.
In addition to the pronouncement above, the following ASU was adopted as of February 3, 2019. The impact on the Company's consolidated financial statements is described within the table below:
Standard
 
Description
ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, issued August 2017.
 
Expands the types of risk management strategies eligible for hedge accounting, refines the documentation and effectiveness assessment requirements and modifies the presentation and disclosure requirements for hedge accounting activities. The adoption of ASU 2017-12 did not have a material impact on the Company’s financial position or results of operations.

New accounting pronouncements issued not yet adopted
Standard
 
Description
ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software: Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, issued July 2018.
 
Aligns the requirements for capitalizing implementation costs in cloud computing arrangements with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. The updated guidance is not expected to have a material impact on the Company’s financial position or results of operations.
ASU No. 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Topic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans, issued August 2018.
 
Modifies the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans and clarifies the disclosure requirements regarding projected benefit obligations and accumulated benefit obligations. The ASU is effective for fiscal years ending after December 15, 2020, with early adoption permitted. The new guidance does not affect the existing recognition or measurement guidance, and therefore will have no impact on the Company’s financial condition or results of operations. The Company is evaluating the impact to related disclosures.
ASU No. 2018-13, Fair Value Measurements (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement, issued August 2018.
 
Modifies the disclosure requirements on fair value measurements in Topic 820 and eliminates ‘at a minimum’ from the phrase ‘an entity shall disclose at a minimum’ to promote the appropriate exercise of discretion by entities when considering fair value disclosures and to clarify that materiality is an appropriate consideration. The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. The new guidance does not affect the existing recognition or measurement guidance, and therefore will have no impact on the Company’s financial condition or results of operations. The Company is evaluating the impact to related disclosures.
ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, issued June 2016.
 
Requires entities to measure and recognize expected credit losses for financial assets measured at amortized cost basis. The estimate of expected credit losses should consider historical information, current information, and reasonable and supportable forecasts of expected losses over the remaining contractual life that affect collectability. The ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019, with early adoption permitted. The new guidance is not expected to have a material impact on the Company’s financial position or results of operations.