Changes in Accounting Policies

In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers," which amends the accounting guidance related to revenues. This amendment replaced most of the existing revenue recognition guidance. The new standard, as amended in July 2015, is effective for fiscal years beginning after December 15, 2017, and interim periods therein. The standard permits the use of either the retrospective or cumulative effect transition method. We adopted this standard utilizing a cumulative effect transition method effective January 2018. While the adoption of the new standard did not have a significant effect on earnings or on the timing of our most significant types of transactions, we made the following changes to our revenue policies:

•

A portion of the transaction price related to sales of finance and insurance contracts is considered variable consideration and subject to accelerated recognition under the new standard. Accordingly, we recognized a $9.2 million asset associated with future estimated variable consideration and a net of tax increase to retained earnings of $6.5 million. We do not believe there will be a significant impact to future revenue recognized.


•	The adoption of the new standard clarifies the determination and capitalization of direct costs incurred. As a result, we reassessed the method used to capitalize and amortize direct costs associated with the sale of lifetime lube, oil and filter contracts, which resulted in a $7.2 million reduction in prepaid commissions and a net of tax $5.1 million reduction to retained earnings.

These changes had an immaterial effect on our Consolidated Statements of Operations and the following impact on our Consolidated Balance Sheets (in thousands):



	As Reported					Balances without the adoption of Topic 606
Impact on Consolidated Balance Sheets	September 30, 2018		Adjustments			Balances without the adoption of Topic 606
Accounts receivable, net	$	470,689	$	(3,631	)	$	467,058
Other current assets	47,648		(1,732		)	45,916
Other non-current assets	487,171		4,835			492,006
Total Assets	5,174,569		(528		)	5,174,041
Accrued Liabilities	259,825		313			260,138
Deferred income taxes	77,684		(599		)	77,085
Total Liabilities	3,969,427		(286		)	3,969,141
Retained earnings	1,109,017		(242		)	1,108,775
Total Liabilities and Stockholders' Equity	5,174,569		(528		)	5,174,041