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New Accounting Standards | 12 Months Ended
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Dec. 31, 2018
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] |
New Accounting Standards | New Accounting Standards Revenue Recognition (Topic 606): Revenue from Contracts with Customers On January 1, 2018, Chevron adopted ASU 2014-09 and its related amendments using the modified retrospective transition method, which did not require the restatement of prior periods. The impact of the adoption of the standard did not have a material effect on the company’s consolidated financial statements. For additional information on the company’s revenue, refer to Note 25 beginning on page 88. Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20) On January 1, 2018, the company adopted ASU 2017-05, which provides clarification regarding the guidance on accounting for the derecognition of nonfinancial assets. The adoption of the standard had no impact on the company’s consolidated financial statements. Compensation - Retirement Benefits (Topic 715) Effective January 1, 2018, Chevron adopted ASU 2017-07 on a retrospective basis. The standard requires the disaggregation of the service cost component from the other components of net periodic benefit cost and allows only the service cost component of net benefit cost to be eligible for capitalization. The effects of retrospective adoption on the Consolidated Statement of Income for 2017 and 2016 were to move $310 and $366 from "Operating expenses" and $338 and $379 from "Selling, general and administrative expenses" to "Other components of net periodic benefits cost," respectively. Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments Effective January 1, 2018, Chevron adopted ASU 2016-15 on a retrospective basis. The standard provides clarification on how certain cash receipts and cash payments are presented and classified on the Consolidated Statement of Cash Flows. The adoption of this ASU did not have a material impact on the company's Consolidated Statement of Cash Flows. For additional information, refer to Note 3 beginning on page 59. Statement of Cash Flows (Topic 230) Restricted Cash Effective January 1, 2018, Chevron adopted ASU 2016-18 on a retrospective basis. The standard requires an entity to explain the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents on the Consolidated Statement of Cash Flows and to provide a reconciliation to the Consolidated Balance Sheet when the cash, cash equivalents, restricted cash and restricted cash equivalents are not separately presented or are presented in more than one line item on the Consolidated Balance Sheet. The company’s restricted cash balances are now included in the beginning and ending balances on the Consolidated Statement of Cash Flows. For additional information, refer to Note 3 beginning on page 59. Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In fourth quarter 2018, the company elected to early adopt ASU 2018-02, which permits the reclassification of stranded tax effects in accumulated other comprehensive income as a result of U.S. tax reform. Accordingly, Chevron reclassified $562 from "Accumulated other comprehensive losses" to "Retained earnings" associated with the reduction of the U.S. statutory tax rate from 35 percent to 21 percent. In accordance with its accounting policy, the company releases stranded income tax effects from accumulated other comprehensive income in the period the underlying activity ceases to exist. ASU 2018-02 allowed for the reclassification of stranded tax effects as a result of the change in tax rates due to U.S. tax reform to be recorded upon adoption of the ASU, rather than at the actual date that the underlying activity ceases to exist. For additional detail, refer to Note 2 beginning on page 58. Leases (Topic 842) In February 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-02, which became effective for the company January 1, 2019. The standard requires that lessees present right-of-use assets and lease liabilities on the Consolidated Balance Sheet. The company plans to elect the short-term lease exception provided for in the standard and therefore will only recognize right-of-use assets and lease liabilities for leases with a term greater than one year. The company further intends to elect the option to apply the transition provisions of the new standard at the adoption date instead of the earliest comparative period presented in the financial statements. The company plans to elect the package of practical expedients to not re-evaluate existing lease contracts or lease classifications and therefore will not make changes to those leases already recognized on the Consolidated Balance Sheet under ASC 840 until the leases are fully amortized, amended, or modified. In addition, the company will not reassess initial direct costs for any existing leases. The company intends to apply the land easement practical expedient. Chevron plans to elect the practical expedient to not separate non-lease components from lease components for most asset classes except for certain asset classes that have significant non-lease (i.e., service) components in addition to the lease component. The company will reclassify some contracts, currently not classified as leases, as operating leases under the new standard. The company completed accounting policy and disclosure updates and system implementation necessary to meet the standard's requirements. The company does not expect the adoption of the ASU to have a material impact on finance leases, which are currently referred to as capital leases. The company estimates that the operating lease right-of-use assets and lease liabilities on the Consolidated Balance Sheet are approximately $4 billion, as of January 1, 2019. The company expects the implementation of the standard will have a minimal impact on the Consolidated Statement of Income and Consolidated Statement of Cash Flows. Financial Instruments - Credit Losses (Topic 326) In June 2016, the FASB issued ASU 2016-13, which becomes effective for the company beginning January 1, 2020. The standard requires companies to use forward-looking information to calculate credit loss estimates. The company is evaluating the effect of the standard on the company’s consolidated financial statements.

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- Definition The entire disclosure for reporting accounting changes and error corrections. It includes the conveyance of information necessary for a user of the Company's financial information to understand all aspects and required disclosure information concerning all changes and error corrections reported in the Company's financial statements for the period. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -URI http://asc.fasb.org/topic&trid=2122394 + Details
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