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Acquisitions And Divestitures | 3 Months Ended
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Aug. 31, 2020
Business Combinations [Abstract] |
Acquisitions And Divestitures |
NOTE 13 — ACQUISITIONS AND DIVESTITURES
During the third quarter of fiscal 2020, as a result of the Company's decision to transition its wholesale and direct to consumer operating model in certain countries within its APLA operating segment, the Company signed definitive agreements to sell its NIKE Brand businesses in Brazil, Argentina, Chile and Uruguay to third-party distributors. Specifically, NIKE entered into agreements to sell its operations in Argentina, Chile and Uruguay to Grupo Axo and to sell substantially all of its operations in Brazil to Grupo SBF S.A., through its wholly owned subsidiary. The Company will retain a small operation in Brazil focused on certain sports marketing assets, local manufacturing and Converse. These transactions are expected to close prior to January 1, 2021, with Grupo SBF S.A.'s transaction subject to Brazil Antitrust Authority approvals. As a result of this decision, beginning in the third quarter of fiscal 2020, the related assets and liabilities of these entities were classified as held-for-sale and remain as such on the Unaudited Condensed Consolidated Balance Sheets as of August 31, 2020, which consisted of the following: •Held-for-sale assets of $545 million, classified within Prepaid expenses and other current assets, primarily consisting of $272 million of Inventories, $174 million of Accounts receivable, net and $54 million of Prepaid expenses and other current assets; and •Held-for-sale liabilities of $88 million, classified within Accrued liabilities, primarily consisting of $52 million of Accrued liabilities, as well as $26 million of Accounts payable. As of May 31, 2020, the related assets and liabilities of these entities classified as held-for-sale on the Consolidated Balance Sheets consisted of the following: •Held-for-sale assets of $506 million, classified within Prepaid expenses and other current assets, primarily consisting of $264 million of Inventories and $138 million of Accounts receivable, net; and •Held-for-sale liabilities of $146 million, classified within Accrued liabilities, primarily consisting of $85 million of Accrued liabilities, as well as $49 million of Accounts payable. The Company has recognized total expected losses related to the transaction of $438 million within Other (income) expense, net, classified within Corporate, and a corresponding allowance within Accrued liabilities on the Unaudited Condensed Consolidated Balance Sheets; $405 million of which was recognized in fiscal 2020, primarily upon meeting the held-for-sale criteria. The expected loss is largely due to the anticipated release of the cumulative foreign currency translation losses recognized by the Argentina, Chile and Uruguay legal entities.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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