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Change in Accounting Method | 6 Months Ended
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Jun. 30, 2012
Change in Accounting Method |
Change in Accounting Method |
1. Change in Accounting Method Effective January 1, 2012, the Company elected to change the method of valuing U.S. inventories to the average cost method, while in prior years these inventories were valued using the last-in, first-out (“LIFO”) method. The Company believes the average cost method is preferable as it conforms the inventory costing methods globally, improves comparability with industry peers and better reflects the current value of inventory on the consolidated balance sheets. All prior periods presented have been adjusted to apply the new method retrospectively. There was no effect of the change on the condensed consolidated results of operations for the three months ended June 30, 2011. The effect of the change for the six months ended June 30, 2011 is as follows:
|  | As originally |  |  |  |  |
|  | reported under |  | Effect of |  | As |
|  | LIFO |  | Change |  | Adjusted |
Manufacturing, shipping and delivery expense |  | $ | (2,990 | ) | $ | 10 |  | $ | (2,980 | )
Amounts attributable to the Company: |  |  |  |  |  |  |
Net earnings from continuing operations |  | 144 |  | 10 |  | 154 |
Basic earnings per share from continuing operations |  | 0.87 |  | 0.06 |  | 0.93 |
Diluted earnings per share from continuing operations |  | 0.86 |  | 0.06 |  | 0.92 |
The effect of the change on the condensed consolidated balance sheets as of December 31, 2011 and June 30, 2011 is as follows:
|  | As originally |  |  |  |  |
|  | reported under |  | Effect of |  | As |
December 31, 2011 |  | LIFO |  | Change |  | Adjusted |
Assets: |  |  |  |  |  |  |
Inventories |  | $ | 1,012 |  | $ | 49 |  | $ | 1,061 |
Share owners’ equity: |  |  |  |  |  |  |
Retained earnings (loss) |  | (428 | ) | 49 |  | (379 | )
June 30, 2011 |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |
Inventories |  | $ | 1,065 |  | $ | 49 |  | $ | 1,114 |
Share owners’ equity: |  |  |  |  |  |  |
Retained earnings |  | 227 |  | 49 |  | 276 |
The effect of the change on the consolidated share owners’ equity as of January 1, 2011 is as follows:
|  | As originally |  |  |  |  |
|  | reported under |  | Effect of |  | As |
|  | LIFO |  | Change |  | Adjusted |
Retained earnings |  | $ | 82 |  | $ | 39 |  | $ | 121 |
The effect of the change on the condensed consolidated cash flows for the six months ended June 30, 2011 is as follows:
|  | As originally |  |  |  |  |
|  | reported under |  | Effect of |  | As |
|  | LIFO |  | Change |  | Adjusted |
Net earnings |  | $ | 156 |  | $ | 10 |  | $ | 166 |
Change in components of working capital |  | (209 | ) | (10 | ) | (219 | )
Had the Company not made this change in accounting method, manufacturing, shipping and delivery expense for the three and six months ended June 30, 2012 would have been higher by $7 million and $1 million, respectively, and net earnings attributable to the Company would have been lower by $7 million and $1 million, respectively, than reported in the condensed consolidated results of operations. In addition, both basic and diluted earnings per share would have been lower by $0.04 and $0.01 for the three and six months ended June 30, 2012, respectively.

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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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB TOPIC 1.N.Q3) -URI http://asc.fasb.org/extlink&oid=6369664&loc=d3e30840-122693 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -SubTopic 10 -Section 45 -Paragraph 23 -URI http://asc.fasb.org/extlink&oid=6368906&loc=d3e21914-107793 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 154 -Paragraph 17, 22, 25, 26 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6801783&loc=d3e22499-107794 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 1 -Section N Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6801783&loc=d3e22595-107794 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -SubTopic 10 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=6801783&loc=d3e22644-107794 + Details
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