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Recent Accounting Pronouncements | 6 Months Ended
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Jul. 14, 2018
Accounting Changes And Error Corrections [Abstract] |
Recent Accounting Pronouncements | 3. RECENT ACCOUNTING PRONOUNCEMENTS Recently adopted accounting pronouncements In May 2014, the FASB issued guidance for recognizing revenue in contracts with customers. This guidance requires entities to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. There are five steps outlined in the guidance to achieve this core principle. This guidance was adopted on December 31, 2017, the first day of our fiscal 2018. The company applied the guidance at adoption on the modified retrospective transition method. This guidance was applied to all contracts not completed at the adoption date. The adoption of this guidance did not impact our financial statements; however, updated disclosures are included in Note 1, Basis of Presentation, of Notes to Condensed Consolidated Financial Statements of this Form 10-Q. Changes were made to our internal control over financial reporting processes to ensure all contracts are reviewed for each of the five revenue recognition steps. Additionally, the company’s revenue disclosures changed beginning in fiscal 2018. The new disclosures require more granularity into our sources of revenue, as well as the assumptions about recognition timing, and include our selection of certain practical expedients and policy elections. In August 2016, the FASB issued guidance on the classification of certain cash receipts and payments in the statements of cash flows. This guidance was adopted on December 31, 2017, the first day of our fiscal 2018, and it did not impact the prior or current period presentation. In January 2017, the FASB issued guidance to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This guidance was adopted on December 31, 2017, the first day of our fiscal 2018. This guidance will impact the company’s assessment of future transactions beginning in our fiscal 2018. In March 2017, the FASB issued guidance that requires all employers to separately present the service cost component from the other pension and postretirement benefit cost components in the income statements. Service cost will now be presented with other employee compensation costs in operating income or capitalized in assets, as appropriate. The other components reported in the income statements will be reported separate from the service cost and outside of income from operations. This guidance was adopted on December 31, 2017, the first day of our fiscal 2018. The guidance is required to be applied on a retrospective basis for the presentation of the service cost component and the other components of net benefit cost, and on a prospective basis for the capitalization of only the service cost component of net benefit cost. The company has elected to use the practical expedient option and presented the amounts disclosed in our prior pension and postretirement footnote for the comparative prior period for the retrospective presentation requirement. The company did not capitalize pension cost. The impact (including defined benefit and postretirement plans) for the twelve and twenty-eight weeks ended July 15, 2017 is presented in the table below (amounts in thousands):
|  | For the Twelve Weeks Ended |
|  | Previously Filed |  |  | Post-adoption |
|  | July 15, 2017 |  |  | July 15, 2017 |
Materials, supplies, labor and other production costs (exclusive of depreciation and amortization shown separately) |  | $ | 468,152 |  |  | $ | 468,246 |
Selling, distribution and administrative expenses |  | $ | 354,193 |  |  | $ | 355,542 |
Income from operations |  | $ | 70,166 |  |  | $ | 68,723 |
Other components of net periodic pension and postretirement benefits credit |  | $ | — |  |  | $ | (1,443 | )
|  | For the Twenty-Eight Weeks Ended |
|  | Previously Filed |  |  | Post-adoption |
|  | July 15, 2017 |  |  | July 15, 2017 |
Materials, supplies, labor and other production costs (exclusive of depreciation and amortization shown separately) |  | $ | 1,076,093 |  |  | $ | 1,076,314 |
Selling, distribution and administrative expenses |  | $ | 815,463 |  |  | $ | 818,608 |
Income from operations |  | $ | 170,291 |  |  | $ | 166,925 |
Other components of net periodic pension and postretirement benefits credit |  | $ | — |  |  | $ | (3,366 | )
In May 2017, the FASB issued guidance to provide clarity and reduce diversity in practice for changes to the terms and conditions of a share-based payment award. This guidance clarifies which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. This guidance was adopted on December 31, 2017, the first day of our fiscal 2018. This guidance will impact any modified share-based payment awards beginning in our fiscal 2018. In August 2017, the FASB amended the guidance for hedge accounting. This guidance makes more financial and nonfinancial hedging strategies eligible for hedge accounting. It also amends the presentation and disclosure requirements and changes the requirements for companies to separately measure ineffectiveness. It is intended to more closely align hedge accounting with companies’ risk management strategies, simplify the application of hedge accounting, and increase transparency as to the scope and results of hedging activities. We elected to early adopt this guidance as of December 31, 2017, the first day of our fiscal 2018. All transition requirements and elections were applied to hedging relationships existing on the date of adoption. The amended presentation and disclosure requirements must be applied prospectively. The guidance requires a modified retrospective transition method in which companies recognize the cumulative effect of the change on the opening balance of each affected component of equity on the balance sheet as of the date of adoption. There was no cumulative effect change to the company at adoption of this amended guidance. In February 2018, the FASB issued guidance to allow a reclassification from AOCI to retained earnings for stranded tax effects resulting from the Act. We elected to early adopt this guidance as of December 31, 2017, the first day of our fiscal 2018. The table below presents the impact of this reclassification on December 31, 2017 (amounts in thousands) (positive value denotes a debit balance):
|  | Impacted Line Item (Dr (Cr)) |
|  | Retained Earnings |  |  | AOCI |
Pension and postretirement plans |  |  | (17,097 | ) |  |  | 17,097 |
Hedged financial instruments |  |  | (1,709 | ) |  |  | 1,709 |
Total reclassification of stranded income tax effects to retained earnings from AOCI |  | $ | (18,806 | ) |  | $ | 18,806 |
Accounting pronouncements not yet adopted In February 2016, the FASB issued guidance that requires an entity to recognize lease liabilities and a right-of-use asset for virtually all leases (other than those that meet the definition of a short-term lease) on the balance sheet and to disclose key information about the entity’s leasing arrangements. Additional updates to the guidance were issued in July 2018. This guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within those periods, with earlier adoption permitted. This guidance must be adopted using a modified retrospective approach for all leases existing at, or entered into after, the date of initial adoption, with an option to elect to use certain transition relief. The company will adopt the updated standard in the first quarter of fiscal 2019. The company intends to choose the option to apply the transition relief provisions of the new standard at our adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. As a result, the comparative periods presented in the financial statements in the period of adoption will be in accordance of current GAAP. We have selected a new software tool to track our leases and are currently in the abstraction stage. This process began in our first quarter of fiscal 2018 and is anticipated to be complete in the second half of fiscal 2018. The company expects a significant impact to our Consolidated Financial Statements because of this guidance. The company currently has significant operating leases with our fiscal 2017 lease expense totaling $95.0 million. In January 2017, the FASB issued guidance to simplify the accounting for goodwill impairment. The guidance removed Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. Companies will still have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. This guidance will be applied prospectively. Companies are required to disclose the nature of and reason for the change in accounting principle upon transition. That disclosure shall be provided in the first annual reporting period and in the interim period within the first annual reporting period when the company adopts this guidance. This change to the guidance is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted after January 1, 2017. The company is currently evaluating when this guidance will be adopted and the impact on our Consolidated Financial Statements. We have reviewed other recently issued accounting pronouncements and concluded that either they are not applicable to our business or no material effect is expected upon future adoption.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -URI http://asc.fasb.org/topic&trid=2122394 + Details
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