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Recent Accounting Pronouncements | 12 Months Ended
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Dec. 31, 2017
Accounting Changes and Error Corrections [Abstract] |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting for Hedging Activities In August 2017, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2017-12, Derivatives and Hedging (Topic 815), intending to improve the transparency of information included in the financial statements by aligning cash flow and fair value hedge accounting with its risk management activities. The ASU eliminates the requirement to separately measure and report hedge ineffectiveness for cash flow hedges and net investment hedges, and generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. The ASU also simplifies certain documentation and assessment requirements, and will incorporate new disclosure requirements and amendments to existing disclosures. This ASU is effective for the Company beginning the first quarter of 2019 and allows for early adoption. The Company is currently evaluating the impact the ASU will have on its Consolidated Financial Statements. Accounting for Goodwill Impairment In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment (Topic 350). The amendments in this update eliminate step two of the current two-step process, which requires a hypothetical purchase price allocation when an impairment is determined to have occurred. This ASU 2017-04 is effective for the Company beginning in the first quarter of 2020 and allows for early adoption. The Company elected to early adopt this standard during the third quarter of 2017. The Company will continue to perform the quantitative goodwill impairment evaluation by comparing the fair value of each reporting unit to its carrying amount. Under the new standard, if the Company is required to recognize an impairment charge, the amount of the charge will be measured as the excess of a reporting unit's carrying amount over its fair value, not to exceed the carrying amount of goodwill. The adoption of this ASU did not have an impact on the Company's Consolidated Financial Statements. Classification of Certain Cash Receipts and Cash Payments In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments (Topic 230), providing guidance for eight specific cash flow issues with the objective of reducing the existing diversity in practice. Among the updates, this standard requires cash payments for debt extinguishment costs to be classified as cash outflows from financing activities, which is consistent with the Company's current practice. This ASU is effective for the Company beginning in the first quarter of 2018 and allows for early adoption. The Company elected to early adopt this standard during the third quarter of 2017. The adoption of this ASU did not have an impact on the Company's Consolidated Financial Statements. Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU introduces a new forward-looking approach, based on expected losses, to estimate credit losses on certain types of financial instruments, including trade receivables. The estimate of expected credit losses will require considerations of historical information, current information and reasonable and supportable forecasts. This ASU also expands the disclosure requirements to enable users of financial statements to understand the assumptions, models and methods for estimating expected credit losses. This ASU is effective for the Company beginning in the first quarter of 2020 and allows for early adoption beginning in the first quarter of 2019. The Company is currently evaluating the impact the ASU will have on its Consolidated Financial Statements. Accounting for Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), requiring lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by long-term leases and to disclose additional quantitative and qualitative information about leasing arrangements. This ASU is effective for the Company beginning in the first quarter of 2019 and allows for early adoption. Although the Company is currently evaluating the provisions of the ASU to determine how it will be affected, the primary impact to the Company of the new ASU will be to record assets and liabilities for current operating leases, which are principally related to the Company’s real estate portfolio. Revenue Recognition In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which, along with amendments issued in 2015 and 2016, will replace most existing revenue recognition guidance under GAAP and eliminate industry-specific guidance. The core principle of the new guidance is that an entity should recognize revenue for the transfer of goods and services equal to an amount it expects to be entitled to receive for those goods and services. The ASU, as amended, will be effective for the Company beginning in the first quarter of 2018. The new guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the cumulative catch-up transition method). The Company established a cross-functional implementation team to analyze the effect of the ASU. The Company utilized a bottom-up approach to analyze the impact of the standard on its contract portfolio by reviewing the current accounting policies and practices to identify potential differences that would result from applying the requirements of the new standard to its revenue contracts. In addition, the Company identified, and is in the process of implementing, appropriate changes to its business processes, systems and controls to support recognition and disclosure under the new standard. The implementation team reports its findings and progress of the project to management and the Audit Committee on a frequent basis. The Company adopted the guidance on January 1, 2018, and utilized the full retrospective method. The Company has finalized its accounting policies under the new standard and it has determined:
• | The accounting for bill and hold transactions will result in revenue for certain of those arrangements being recognized earlier than under current GAAP. This change will not materially impact Net sales or Net income;
• | In certain security software transactions when accompanying third-party delivered software assurance is deemed to be critical or essential to the core functionality of the software license, the Company has determined that the software license and the accompanying third-party delivered software assurance are a single performance obligation. The value of the product is primarily the accompanying support delivered by a third-party and therefore the Company is acting as an agent in these transactions and will recognize them on a net basis. The Company currently recognizes revenue from the software license on a gross basis (i.e., acting as a principal) and accompanying third-party delivered software assurance on a net basis. This change will reduce both Net sales and Cost of sales with no impact on reported Gross profit.
• | The accounting for revenue related to hardware, software (excluding the above) and services will remain substantially unchanged.
The adoption of the ASU is expected to impact the Company’s results as follows:
|  | December 31, 2017 |  | December 31, 2016
(in millions) (except per share amounts) |  | As Reported |  | New Revenue Standard Adjustment |  | As Adjusted |  | As Reported |  | New Revenue Standard Adjustment |  | As Adjusted
Net sales |  | $ | 15,191.5 |  |  | $ | (358.6 | ) |  | $ | 14,832.9 |  |  | $ | 13,981.9 |  |  | $ | (309.2 | ) |  | $ | 13,672.7 |
Gross profit |  | 2,449.9 |  |  | 0.3 |  |  | $ | 2,450.2 |  |  | 2,327.2 |  |  | 1.1 |  |  | 2,328.3 |
Gross profit margin |  | 16.1 | % |  | 40 bps |  |  | 16.5 | % |  | 16.6 | % |  | 40 bps |  |  | 17.0 | %
Income from operations |  | 866.1 |  |  | 0.4 |  |  | 866.5 |  |  | 819.2 |  |  | 0.8 |  |  | 820.0 |
Income tax expense |  | (137.3 | ) |  | (0.3 | ) |  | (137.6 | ) |  | (248.0 | ) |  | (0.1 | ) |  | (248.1 | )
Net income |  | $ | 523.0 |  |  | $ | 0.1 |  |  | $ | 523.1 |  |  | $ | 424.4 |  |  | $ | 0.7 |  |  | $ | 425.1 |
Net income per common share |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | 3.37 |  |  | $ | — |  |  | $ | 3.37 |  |  | $ | 2.59 |  |  | $ | 0.01 |  |  | $ | 2.60 |
Diluted |  | $ | 3.31 |  |  | $ | — |  |  | $ | 3.31 |  |  | $ | 2.56 |  |  | $ | — |  |  | $ | 2.56 |
|  | December 31, 2017 |  | December 31, 2016
(in millions) |  | As Reported |  | New Revenue Standard Adjustment |  | As Adjusted(1) |  | As Reported |  | New Revenue Standard Adjustment |  | As Adjusted
Accounts receivable |  | $ | 2,320.5 |  |  | $ | 8.8 |  |  | $ | 2,329.3 |  |  | $ | 2,168.6 |  |  | $ | 0.3 |  |  | $ | 2,168.9 |
Merchandise inventory |  | 449.5 |  |  | (38.0 | ) |  | 411.5 |  |  | 452.0 |  |  | (28.1 | ) |  | 423.9 |
Miscellaneous receivables |  | 336.5 |  |  | 6.5 |  |  | 343.0 |  |  | 234.9 |  |  | 2.6 |  |  | 237.5 |
Prepaid expenses and other |  | 127.4 |  |  | 40.9 |  |  | 168.3 |  |  | 118.9 |  |  | 35.3 |  |  | 154.2 |
Total current assets |  | 3,378.1 |  |  | 18.2 |  |  | 3,396.3 |  |  | 3,238.1 |  |  | 10.1 |  |  | 3,248.2 |
Other assets |  | 40.8 |  |  | (8.1 | ) |  | 32.7 |  |  | 36.0 |  |  | (0.1 | ) |  | 35.9 |
Total assets |  | 6,956.6 |  |  | 10.1 |  |  | 6,966.7 |  |  | 6,948.4 |  |  | 10.0 |  |  | 6,958.4 |
Deferred revenue |  | 194.0 |  |  | (35.2 | ) |  | 158.8 |  |  | 172.6 |  |  | (29.1 | ) |  | 143.5 |
Income tax payable |  | 15.1 |  |  | 1.1 |  |  | 16.2 |  |  | 2.6 |  |  | 0.7 |  |  | 3.3 |
Other accrued expenses |  | 180.2 |  |  | 41.6 |  |  | 221.8 |  |  | 147.2 |  |  | 36.0 |  |  | 183.2 |
Total current liabilities |  | 2,514.6 |  |  | 7.5 |  |  | 2,522.1 |  |  | 2,280.7 |  |  | 7.6 |  |  | 2,288.3 |
Total liabilities |  | 5,973.7 |  |  | 7.5 |  |  | 5,981.1 |  |  | 5,902.9 |  |  | 7.6 |  |  | 5,910.5 |
Total stockholders’ equity |  | $ | 982.9 |  |  | $ | 2.7 |  |  | $ | 985.6 |  |  | $ | 1,045.5 |  |  | $ | 2.4 |  |  | $ | 1,047.9 |
(1) | Amounts may not cross-foot due to rounding.
The adoption of the ASU did not impact cash flow provided by operating activities for the years ended December 31, 2017 and 2016.

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -URI http://asc.fasb.org/topic&trid=2122394 + Details
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