XML 46 R25.htm IDEA: XBRL DOCUMENT v3.26.1
BASIS OF PRESENTATION (Policies)
 6 Months Ended
Jun. 30, 2026
Accounting Policies [Abstract]  
Basis of Presentation
The accompanying interim condensed consolidated financial statements and related disclosures have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) and should be read in conjunction with the consolidated financial statements and notes included in Edwards Lifesciences' Annual Report on Form 10-K for the year ended December 31, 2025. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) have been condensed or omitted. Certain reclassifications have been made to prior period financial statements to conform to classifications used in the current period.
Consolidation
The condensed consolidated financial statements include the accounts of all wholly-owned subsidiaries and variable interest entities (“VIEs”) for which the Company is the primary beneficiary. The Company attributes the net income or losses of its consolidated VIE to controlling and noncontrolling interests using the hypothetical liquidation at book value method. All intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from those estimates.
Recently Adopted Accounting Standards and New Accounting Standards Not Yet Adopted
Recently Adopted Accounting Standards

In July 2025, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2025‑05, which provides a practical expedient for estimating expected credit losses by assuming current conditions as of the balance sheet date remain unchanged when developing forecasts. The Company adopted this guidance effective January 1, 2026 with no material impact on its consolidated financial statements.

New Accounting Standards Not Yet Adopted

In September 2025, the FASB issued ASU 2025-07 on derivatives and hedging and revenue from contracts with customers. The amendment provides clarity on application of derivative accounting to certain non-exchange-traded contracts with features based on operations or activities of one of the parties to the contract. The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within those periods and can be applied on a prospective or modified retrospective basis. Early adoption is permitted. The Company is currently evaluating the impact the guidance will have on its consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06 on internal-use software related to accounting for internal-use software costs. The amendment in this update improves the operability of the guidance by clarifying the criteria for capitalization, which begins when both of the following occur: (1) management has authorized and committed to funding the software project and (2) it is probable that the project will be completed and the software will be used to perform the function intended. The guidance is effective for fiscal years beginning after December 15, 2027, and interim periods within those periods. Early adoption is permitted. The guidance can be applied on a fully prospective basis, a modified basis for in-process projects, or a full retrospective basis. The Company is currently evaluating the impact the guidance will have on its consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03 on income statement presentation to require disclosure, in the notes to the financial statements, of disaggregated information about certain costs and expenses, including purchases of inventory, employee compensation, and depreciation and amortization included in each relevant expense caption within continuing operations. The guidance is effective for fiscal years beginning after December
15, 2026, and interim periods beginning after December 15, 2027. The Company is currently evaluating the impact the guidance will have on its consolidated financial statements.
Derivatives
Derivative financial instruments involve credit risk in the event the counterparty should default. The Company diversifies its derivative financial instruments among counterparties to minimize exposure to any one of these entities. The Company also uses International Swap Dealers Association master-netting agreements. The master-netting agreements provide for the net settlement of all contracts through a single payment in a single currency in the event of default, as defined by the agreements.

The Company uses foreign currency forward exchange contracts and cross-currency swap contracts to manage its exposure to changes in currency exchange rates from (a) future cash flows associated with intercompany transactions and certain local currency expenses expected to occur within 1.5 years (designated as cash flow hedges) and (b) its net investment in certain foreign subsidiaries (designated as net investment hedges). The Company also uses foreign currency forward exchange contracts that are not designated as hedging instruments to offset the transaction gains and losses associated with revaluation of certain assets and liabilities denominated in currencies other than their functional currencies (resulting principally from intercompany and foreign currency transactions).

All derivative financial instruments are recognized at fair value in the condensed consolidated balance sheets. The Company reports in Accumulated Other Comprehensive Loss the gain or loss on derivative financial instruments that are designated, and that qualify, as cash flow hedges. The Company reclassifies these gains and losses into earnings in the same line item and in the same period in which the underlying hedged transactions affect earnings. Changes in the fair value of net investment hedges are reported in Accumulated Other Comprehensive Loss as a part of the cumulative translation adjustment and would be reclassified into earnings if the underlying net investment is sold or substantially liquidated. The portion of the change in fair value related to components excluded from the hedge effectiveness assessment are amortized into earnings over the life of the derivative. The gains and losses on derivative financial instruments for which the Company does not elect hedge accounting treatment are recognized in the consolidated statements of operations in each period based upon the change in the fair value of the derivative financial instrument. Cash flows from net investment hedges are reported as investing activities in the consolidated statements of cash flows, and cash flows from all other derivative financial instruments are reported as operating activities.
Earnings Per Share
Basic earnings per share is computed by dividing net income by the weighted-average common shares outstanding during the period. Diluted earnings per share is computed based on the weighted-average common shares outstanding plus the effect of dilutive potential common shares outstanding during the period calculated using the treasury stock method. Dilutive potential common shares include employee equity share options, nonvested shares, and similar equity instruments granted by the Company. Potential common share equivalents have been excluded where their inclusion would be anti-dilutive.