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Recent Accounting Pronouncements | 9 Months Ended
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Oct. 06, 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 forty weeks ended October 7, 2017 is presented in the table below (amounts in thousands):
|  | For the Twelve Weeks Ended |
|  | Previously Filed |  |  | Post-adoption |
|  | October 7, 2017 |  |  | October 7, 2017 |
Materials, supplies, labor and other production costs (exclusive of depreciation and amortization shown separately) |  | $ | 476,170 |  |  | $ | 476,264 |
Selling, distribution and administrative expenses |  | $ | 355,599 |  |  | $ | 356,826 |
Loss from operations |  | $ | (53,766 | ) |  | $ | (52,057 | )
Other components of net periodic pension and postretirement benefits credit |  | $ | — |  |  | $ | (1,321 | )
|  | For the Forty Weeks Ended |
|  | Previously Filed |  |  | Post-adoption |
|  | October 7, 2017 |  |  | October 7, 2017 |
Materials, supplies, labor and other production costs (exclusive of depreciation and amortization shown separately) |  | $ | 1,552,263 |  |  | $ | 1,552,578 |
Selling, distribution and administrative expenses |  | $ | 1,171,062 |  |  | $ | 1,175,434 |
Income from operations |  | $ | 116,525 |  |  | $ | 114,868 |
Other components of net periodic pension and postretirement benefits credit |  | $ | — |  |  | $ | (4,687 | )
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. 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 after, the date of initial adoption, with an option to elect transition relief. The company chooses to elect the modified retrospective approach provided by the guidance and will adopt the updated standard in the first quarter of fiscal 2019. At the adoption date, the company will recognize a cumulative-effect adjustment to the opening balance of retained earnings. As a result, the comparative periods presented in the financial statements in the period of adoption will be in accordance of current GAAP. The company anticipates electing the package of transition practical expedients within the new guidance. As required by the new standard, these expedients will be elected as a package, and consistently applied across the company’s lease portfolio. Given this election, the company will not reassess the following:
| • | whether any expired or existing contracts are or contain leases;
| • | the lease classification for any expired or existing leases; or
| • | the treatment of initial direct costs relating to any existing leases.
The company has a cross-functional project team focused on implementation of this new guidance. Our analysis includes a review of our current accounting policies and procedures and how these will be impacted upon adoption. We acquired a lease accounting software to facilitate implementation, and are currently installing, configuring and testing the software. The lease data abstraction is substantially complete. Currently, we are unable to reasonably estimate the expected increase in assets and liabilities on our Condensed Consolidated Balance Sheets upon adoption. We expect a significant impact to our consolidated balance sheet, but not to our consolidated income statement. The most significant impact will be the recognition of right-of-use assets and lease liabilities for operating leases, while our accounting for finance leases will remain substantially unchanged. The company currently has significant operating leases with our fiscal 2017 lease expense totaling $95.0 million. In June 2016, the FASB issued guidance that effects loans, debt securities, trade receivables, net investments in leases, off-balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The company is determining what the impact, if any, will be on the trade and notes receivables recorded in our Consolidated Financial Statements. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019 (the company’s fiscal 2020). Early adoption is permitted for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018 (the company’s fiscal 2019). The company is evaluating when this guidance will be adopted and the impact on our Consolidated Financial Statements. 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. In August 2018, the FASB issued guidance to modify the disclosure requirements on fair value measurements. The guidance removes, modifies, and adds certain disclosures related to Level 1, Level 2, and Level 3 assets. The guidance is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. This is applicable in the company’s fiscal 2020 Consolidated Financial Statements. The company is currently evaluating when this guidance will be adopted and the impact on our Consolidated Financial Statements. In August 2018, the FASB issued guidance to modify the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The guidance is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020 (the company’s fiscal 2021). Disclosures were removed for the amounts in AOCI expected to be recognized as components of net periodic benefit cost over the next fiscal year, the amount and timing of assets expected to be returned to the employer, certain related party disclosures, and the effects of a one-percentage-point change in the assumed health care cost trend rates. Additional disclosures include the weighted average interest crediting rate for plan with promised crediting interest rates and an explanation of the reasons for significant gains and losses related to the benefit obligation for the period. This guidance shall be applied on a retrospective basis. 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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