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Revision to Previously Reported Financial Information | 12 Months Ended
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Dec. 31, 2020
Accounting Changes and Error Corrections [Abstract] |
Revision to Previously Reported Financial Information | REVISION TO PREVIOUSLY REPORTED FINANCIAL INFORMATION In conjunction with our close process for the third quarter of 2020, we identified accounting errors related to the recognition of a liability for unasserted asbestos claims. The adjustments primarily relate to an incurred but not reported (“IBNR”) liability associated with unasserted asbestos claims, but also include adjustments related to the associated receivables for expected insurance proceeds for asbestos settlement and defense costs from insurance coverage and the recognition as an expense the related legal fees that were previously estimated to be recoverable from insurance carriers for which coverage is not currently sufficient following the recognition of the IBNR and to correct certain other previously identified immaterial misstatements. Prior periods not presented herein will be revised, as applicable, in future filings. The following table presents the impact of correcting the errors previously discussed on the affected line items of our consolidated balance sheet as of December 31, 2019:
| December 31, 2019
(Amounts in thousands) | As Reported |  | Adjustments |  | As Revised
Prepaid expenses and other | 105,101 |  |  | 1,377 |  |  | 106,478 |
Total current assets | 2,505,370 |  |  | 1,377 |  |  | 2,506,747 |
Property, plant and equipment, net of accumulated depreciation (1) | 572,175 |  |  | (8,611) |  |  | 563,564 |
Other assets, net of allowance for expected credit losses (2) | 227,185 |  |  | 25,869 |  |  | 253,054 |
Total assets | 4,919,642 |  |  | 18,635 |  |  | 4,938,277 |
Contract liabilities (3) | 216,541 |  |  | 4,554 |  |  | 221,095 |
Total current liabilities | 1,112,888 |  |  | 4,554 |  |  | 1,117,442 |
Retirement obligations and other liabilities (4) | 473,295 |  |  | 57,699 |  |  | 530,994 |
Retained earnings (5) | 3,695,862 |  |  | (43,618) |  |  | 3,652,244 |
Total Flowserve Corporation shareholders’ equity | 1,790,357 |  |  | (43,618) |  |  | 1,746,739 |
Total equity | 1,815,959 |  |  | (43,618) |  |  | 1,772,341 |
Total liabilities and equity | $ | 4,919,642 |  |  | $ | 18,635 |  |  | $ | 4,938,277 |
_______________________________________ (1) Adjustment related to the misclassification of Software as a Service arrangements as property, plant and equipment rather than other assets, net, as prescribed by ASU 2018-15. (2) Adjustment related to the associated receivables for expected insurance proceeds for asbestos settlements and defense costs. (3) Adjustment related to one of our sites for correction in contract position caused by errors in estimated costs under the over time revenue recognition model. (4) Adjustment primarily relates to IBNR reserves associated with unasserted asbestos claims. (5) The adjustments to retained earnings represents the cumulative effect of the immaterial errors that were corrected in periods prior to and through December 31, 2019. The following table presents the impact of correcting the errors previously discussed on the affected line items of our consolidated statement of income for the year ended December 31, 2019:
(Amounts in thousands) | Year Ended December 31, 2019
| As Reported |  | Adjustments |  | As Revised
Sales (1) | $ | 3,944,850 |  |  | $ | (5,153) |  |  | $ | 3,939,697 |
Cost of sales | (2,649,480) |  |  | (874) |  |  | (2,650,354) |
Gross profit | 1,295,370 |  |  | (6,027) |  | — |  | 1,289,343 |
Selling, general and administrative expense (2) | (899,813) |  |  | (13,390) |  |  | (913,203) |
Operating income | 406,040 |  |  | (19,417) |  |  | 386,623 |
Earnings before income taxes | 341,850 |  |  | (19,417) |  |  | 322,433 |
Provision for income taxes (3) | (80,070) |  |  | 4,577 |  |  | (75,493) |
Net earnings, including noncontrolling interests | 261,780 |  |  | (14,840) |  |  | 246,940 |
Net earnings attributable to Flowserve Corporation | $ | 253,668 |  |  | $ | (14,840) |  |  | $ | 238,828 |
Net earnings per share attributable to Flowserve Corporation common shareholders: |  |  |  |  |
Basic | $ | 1.94 |  |  | $ | (0.12) |  |  | $ | 1.82 |
Diluted | 1.93 |  |  | (0.12) |  |  | 1.81 |
______________________________________ (1) Adjustment related to one of our sites related to errors in estimated costs under the over time revenue recognition model. (2) Adjustment primarily related to asbestos settlement and defense costs from insurance coverage and expense for related legal fees. (3) Adjustment related to tax impacts of the matters described in notes (1) and (2), above. The following table presents the impact of correcting the errors previously discussed on the affected line items of our consolidated statement of income for the year ended December 31, 2018:
(Amounts in thousands) | Year Ended December 31, 2018
| As Reported |  | Adjustments |  | As Revised
Sales (1) | $ | 3,832,666 |  |  | $ | 3,033 |  |  | $ | 3,835,699 |
Gross profit | 1,187,836 |  |  | 3,033 |  | — |  | 1,190,869 |
Selling, general and administrative expense (2) | (943,714) |  |  | (22,870) |  |  | (966,584) |
Operating income | 247,538 |  |  | (19,837) |  |  | 227,701 |
Earnings before income taxes | 176,274 |  |  | (19,837) |  |  | 156,437 |
Provision for income taxes (3) | (51,224) |  |  | 4,674 |  |  | (46,550) |
Net earnings, including noncontrolling interests | 125,050 |  |  | (15,163) |  |  | 109,887 |
Net earnings attributable to Flowserve Corporation | $ | 119,671 |  |  | $ | (15,163) |  |  | $ | 104,508 |
Net earnings per share attributable to Flowserve Corporation common shareholders: |  |  |  |  |
Basic | $ | 0.91 |  |  | $ | (0.11) |  |  | $ | 0.80 |
Diluted | 0.91 |  |  | (0.11) |  |  | 0.80 |
_______________________________________ (1) Adjustment related to one of our sites related to errors in estimated costs under the over time revenue recognition model. (2) Adjustment primarily related to asbestos settlement and defense costs from insurance coverage and expense for related legal fees and broad-based annual incentive compensation. (3) Adjustment related to tax impacts of the matters described in notes (1) and (2), above. The consolidated statements of shareholders' equity and the consolidated statements of comprehensive income for the periods ending December 31, 2020, 2019 and 2018 have also been revised to reflect the impacts to net earnings. The impact of errors arising in periods commencing prior to January 1, 2018 has been reflected as a reduction to opening retained earnings in the amount of $28.8 million in the consolidated statement of shareholders' equity. Except for as described below in (1), the effect of the adjustments to the consolidated statements of cash flows for the period ended December 31, 2019 primarily related to net earnings, including noncontrolling interests, for the change in net earnings in the table above and were offset primarily by impacts to changes in operating assets and liabilities. The following table presents the impact of correcting the errors previously discussed on the affected line items of our consolidated statement of cash flows for the years ended December 31, 2019 and 2018:
| Year Ended December 31, 2019
(Amounts in thousands) | As Reported |  | Adjustments |  | As Revised
Net cash flows provided (used) by operating activities (1) | $ | 312,741 |  |  | $ | 11,356 |  |  | $ | 324,097 |
Net cash flows provided (used) by investing activities (1) | (23,837) |  |  | (9,546) |  |  | (33,383) |
Net cash flows provided (used) by financing activities | (229,654) |  |  | (1,810) |  |  | (231,464) |
Cash and cash equivalents at end of period (1) | 670,980 |  |  | — |  |  | 670,980 |
_______________________________________ (1) Primarily related to adjustments resulting from the misclassification of Software as a Service arrangements as property, plant and equipment rather than other assets, net, as prescribed by ASU 2018-15, and adjustments related to our international operations’ exposure to fluctuations in foreign currency exchange rates, resulting from our Argentinian subsidiary's change in using the U.S. dollar as our functional currency in Argentina. The effects of the prior period revisions on the consolidated statements of cash flows for the year ended December 31, 2018 were primarily to the change in net earnings, as well as the changes in net cash flows provided (used) by operating activities, limited to prepaid expenses and other assets, net, accounts payable, accrued liabilities and income taxes payable, retirement obligations and other and deferred tax movements. Accordingly, there were no changes to any subtotals within the 2018 consolidated statement of cash flows. The impacts of the revisions have been reflected throughout the financial statements, including the applicable footnotes, as appropriate.

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- Definition The entire disclosure for reporting accounting changes and error corrections. It includes the conveyance of information necessary for a user of the Company's financial information to understand all aspects and required disclosure information concerning all changes and error corrections reported in the Company's financial statements for the period. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -SubTopic 10 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22644-107794 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -URI http://asc.fasb.org/topic&trid=2122394 + Details
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