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Change in Accounting Principles | 9 Months Ended
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Sep. 30, 2018
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] |
Changes in Accounting Principles [Text Block] | Note 2—Changes in Accounting Principles We adopted the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2014-09, “Revenue from Contracts with Customers,” and its amendments issued by the provisions of ASU No. 2016-08, “Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” ASU No. 2016-10, “Identifying Performance Obligations and Licensing,” ASU No. 2016-12, “Narrow-Scope Improvements and Practical Expedients,” and ASU No. 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue From Contracts with Customers,” collectively Accounting Standards Codification (ASC) Topic 606, “Revenue from Contracts with Customers,” (ASC Topic 606) beginning January 1, 2018. ASC Topic 60 6 outlines a single comprehensive model for an entity to use in accounting for revenue arising from all contracts with customers except where revenues are in scope of another accounting standard. T he ASU superseded the revenue recognition requirements in ASC Topic 605, “Revenue Recognition,” and most industry-specific guidance. ASC Topic 606 sets forth a five-step model for determining when and how revenue is recognized. Under the model, an entity is required to recognize revenue to depict the transfer o f goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods and services. ASC Topic 606 also requires certain additional revenue-related disclosures. The adoption of ASC Topic 606 did not have a material impact on our consolidated financial statements. See Note 20—S ales and Other Operating Revenues for additional information related to this ASC. We adopted the provisions of F ASB AS U No. 2016-01, “Recognition and Measurement of Financial Assets and Liabilities,” (AS U No. 2016-01) beginning January 1, 2018. The ASU, among other things, requires an entit y to record the changes in fair value of equity investments, other than investments accounted for using the equity method, within net i ncome. Under this ASU, an entity is no longer able to recognize unrealized holding gains and losses on available-for-sale securities in other comprehensive income and instead must recognize them in the income statement. See Note 7—Investment i n Cenovus Energy and Note 16—Accumulated Other Comprehensive Loss for additional information relating to this ASU
The cumulative effect of the changes made to our consolidated balance sheet at January 1, 2018, for the
adoption of ASC Topic 606 and ASU No. 2016-01 were as follows:
| Millions of Dollars
|  | December 31 |  | ASC Topic 606 |  | ASU No. 2016-01 |  | January 1
|  | 2017 |  | Adjustments |  | Adjustments |  | 2018
Liabilities |  |  |  |  |  |  |  |
Other accruals | $ | 1,029 |  | 104 |  | - |  | 1,133
Total current liabilities |  | 9,397 |  | 104 |  | - |  | 9,501
Deferred income taxes |  | 5,282 |  | (31) |  | - |  | 5,251
Other liabilities and deferred credits |  | 1,269 |  | 147 |  | - |  | 1,416
Total liabilities |  | 42,561 |  | 220 |  | - |  | 42,781
Equity |  |  |  |  |  |  |  |
Accumulated other comprehensive loss | $ | (5,518) |  | - |  | 58 |  | (5,460)
Retained earnings |  | 29,391 |  | (220) |  | (58) |  | 29,113
Total common stockholders' equity |  | 30,607 |  | (220) |  | - |  | 30,387
Total equity |  | 30,801 |  | (220) |  | - |  | 30,581
For discussion of adjustments for ASU No. 2016-01 and ASC Topic 606, see Note 7—Investment in Cenovus Energy and Note 20—Sales and
Other Operating Revenues, respectively.
We adopted the provisions of FASB ASU No. 2017-07, “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,” beginning January 1, 2018. We retrospectively applied the presentation of service cost separate from the other components of net periodic costs. The interest cost, expected return on plan assets, amortization of prior service cost/credit, recognized net actuarial loss/gain, settlement expense, curtailment loss/gain, and special termination benefits have been reclassified from the “Production and operating expenses,” “Selling, general and administrative expenses,” and “Exploration expenses” lines to the “Other expenses” line on our consolidated income statement. We elected to apply the prac tical expedient which allows us to reclassify amounts disclosed previously in the employee benefit plans footnote as the basis for applying retrospective presentation for prior comparative periods as it is impracticable to determine the disaggregation of t he cost components for amounts capitalized and amortized in those periods. On a prospective basis, the other components of net periodic benefit costs will not be included in amounts capitalized in inventory or properties, plants, and equipment (PP&E)
The effect of the retrospective presentation change related to the net periodic benefit cost of our defined benefit
pension and other postretirement employee benefits plans on our consolidated income statement was as
follows:
| Millions of Dollars
|  | Previously |  | Effect of Change |  | As
|  | Reported |  | Higher/(Lower) |  | Revised
Three Months Ended September 30, 2017 |  |  |  |  |  |
Production and operating expenses | $ | 1,224 |  | (2) |  | 1,222
Selling, general and administrative expenses |  | 132 |  | (22) |  | 110
Exploration expenses |  | 75 |  | (2) |  | 73
Other expenses |  | 51 |  | 26 |  | 77
Nine Months Ended September 30, 2017 |  |  |  |  |  |
Production and operating expenses | $ | 3,849 |  | (11) |  | 3,838
Selling, general and administrative expenses |  | 423 |  | (121) |  | 302
Exploration expenses |  | 724 |  | (4) |  | 720
Other expenses |  | 285 |  | 136 |  | 421
We adopted the provisions of FASB ASU No. 2016-15, “Classification of Certain Cash Receipts and Cash Payments,” beginning January 1, 2018. This ASU clarifies how certain cash receipts and cash payments should be classified and presented in the statement of cash flows. We have made an accounting policy election to classify distributions received from equity method investees using the nature of the distribution approach which classifies distributions received from investees as either cash inflows from operating activities or cash inflows from investing activities in the statement of cash flows based on the nature of the activ ities of the investee that generated the distribution. The impact of adopting this ASU was not material to prior presented periods. We adopted the provisions of FASB ASU No. 2016-18, “Restricted Cash,” beginning January 1, 2018. This ASU requires amount s deemed restricted cash to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows, and presentation should permit a reconciliation when cash, cash equivalent s and restricted cash are presented in more than one line item on the balance sheet. We have amounts deposited in statutory bank accounts in certain countries to satisfy asset retirement obligations (ARO). These amounts are deemed restricted cash and are included in the “Other assets” line of our consolidated balance sheet. This standard is required to be applied retrospectively to all periods presented, but the impact in those periods was not material.

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- Definition The entire disclosure of changes in accounting principles, including adoption of new accounting pronouncements, that describes the new methods, amount and effects on financial statement line items. + 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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