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Note 1. Significant Accounting Policies | 3 Months Ended
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Dec. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] |
1. Basis of Presentation and Summary of Significant Accounting Policies
On October 31, 2016, Adient plc ("Adient") became an independent company as a result of the separation of the automotive seating and interiors business (the "separation") from Johnson Controls International plc ("the former Parent"). Adient was incorporated under the laws of Ireland in fiscal 2016 for the purpose of holding these businesses. Adient's ordinary shares began trading "regular-way" under the ticker symbol "ADNT" on the New York Stock Exchange on October 31, 2016. Upon becoming an independent company, the capital structure of Adient consisted of 500 million authorized ordinary shares and 100 million authorized preferred shares (par value of $0.001 per ordinary and preferred share). The number of Adient ordinary shares issued on October 31, 2016 was 93,671,810. Adient is the world's largest automotive seating supplier. Adient has a leading market position in the Americas, Europe and China, and has longstanding relationships with the largest global original equipment manufacturers, or OEMs, in the automotive space. Adient's proprietary technologies extend into virtually every area of automotive seating solutions, including complete seating systems, frames, mechanisms, foam, head restraints, armrests, trim covers and fabrics. Adient is an independent seat supplier with global scale and the capability to design, develop, engineer, manufacture, and deliver complete seat systems and components in every major automotive producing region in the world. Adient also participates in the automotive interiors market primarily through its global automotive interiors joint venture in China, Yanfeng Global Automotive Interior Systems Co., Ltd., or YFAI. Basis of Presentation The accompanying consolidated financial statements are presented on a consolidated basis and include all of the accounts and operations of Adient and its consolidated subsidiaries. Intercompany accounts and transactions have been eliminated. The consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. The preparation of these consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. The interim consolidated financial statements and accompanying notes are unaudited and should be read in conjunction with Adient’s annual consolidated financial statements and the notes thereto included in its Annual Report on Form 10-K for the fiscal year ended September 30, 2017. Consolidated VIEs Based upon the criteria set forth in the Financial Accounting Standards Board (the FASB) Accounting Standards Codification (ASC) 810, "Consolidation," Adient has determined that it was the primary beneficiary in two variable interest entities (VIEs) for the reporting periods ended December 31, 2017 and 2016, as Adient absorbs significant economics of the entities and has the power to direct the activities that are considered most significant to the entities. The two VIEs manufacture seating products in North America for the automotive industry. Adient funds the entities' short-term liquidity needs through revolving credit facilities and has the power to direct the activities that are considered most significant to the entities through its key customer supply relationships. The carrying amounts and classification of assets (none of which are restricted) and liabilities included in Adient's consolidated statements of financial position for the consolidated VIEs are as follows:
(in millions) |  | December 31, 2017 |  | September 30, 2017
Current assets |  | $ | 210 |  |  | $ | 232 |
Noncurrent assets |  | 63 |  |  | 56 |
Total assets |  | $ | 273 |  |  | $ | 288 |
Current liabilities |  | $ | 159 |  |  | $ | 169 |
Total liabilities |  | $ | 159 |  |  | $ | 169 |
Revisions As disclosed in the fiscal 2017 Form 10-K, Adient revised previously reported results to correctly report equity income from a non-consolidated affiliate in the Seating segment related to engineering costs that were inappropriately capitalized. Adient also revised previously reported net sales and cost of sales to correctly report certain sales on a net versus gross basis in the Seating segment. The following tables disclose the quarterly impact for the three months ended December 31, 2016 of such previously disclosed revisions. Adient assessed the materiality of these misstatements on prior periods’ financial statements in accordance with SEC Staff Accounting Bulletin ("SAB") No. 99, Materiality, codified in ASC 250, Presentation of Financial Statements, and concluded that these misstatements were not material, individually or in the aggregate, to any previously issued financial statements. In accordance with ASC 250 (SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements), the consolidated financial statements and notes to consolidated financial statements as of December 31, 2016 have been revised. Adient will revise remaining fiscal 2017 interim periods in future quarterly filings. The following tables show the impact of these revisions on impacted line items from Adient's consolidated financial statements.
|  | Consolidated Statements of Income (Loss)
|  | Three Months Ended December 31, 2016
(in millions, except per share data) |  | As Reported |  | Adjustment |  | As Revised
Net sales |  | $ | 4,038 |  |  | $ | (12 | ) |  | $ | 4,026 |
Cost of sales |  | 3,688 |  |  | (12 | ) |  | 3,676 |
Gross profit |  | 350 |  |  | — |  |  | 350 |
Equity income |  | 101 |  |  | (7 | ) |  | 94 |
Earnings before interest and income taxes |  | 234 |  |  | (7 | ) |  | 227 |
Income before income taxes |  | 199 |  |  | (7 | ) |  | 192 |
Net income (loss) |  | 171 |  |  | (7 | ) |  | 164 |
Net income (loss) attributable to Adient |  | 149 |  |  | (7 | ) |  | 142 |
Earnings per share: |  |  |  |  |  |
Basic |  | $ | 1.59 |  |  | $ | (0.07 | ) |  | $ | 1.52 |
Diluted |  | $ | 1.59 |  |  | $ | (0.08 | ) |  | $ | 1.51 |
|  | Consolidated Statements of Comprehensive Income (Loss)
|  | Three Months Ended December 31, 2016
(in millions) |  | As Reported |  | Adjustment |  | As Revised
Total comprehensive income (loss) |  | $ | (280 | ) |  | $ | (7 | ) |  | $ | (287 | )
Comprehensive income (loss) attributable to Adient |  | (300 | ) |  | (7 | ) |  | (307 | )
|  | Consolidated Statements of Cash Flows
|  | Three Months Ended December 31, 2016
(in millions) |  | As Reported |  | Adjustment |  | As Revised
Operating Activities |  |  |  |  |  |
Net income (loss) |  | $ | 171 |  |  | $ | (7 | ) |  | $ | 164 |
Equity in earnings of partially-owned affiliates, net of dividends received |  | (79 | ) |  | 7 |  |  | (72 | )
Cash provided (used) by operating activities |  | (13 | ) |  | — |  |  | (13 | )
Earnings Per Share The following table shows the computation of basic and diluted earnings per share:
|  | Three Months Ended December 31,
(in millions, except per share data) |  | 2017 |  | 2016
Numerator: |  |  |  |
Net income (loss) attributable to Adient |  | $ | (216 | ) |  | $ | 142 |
Denominator: |  |  |  |
Shares outstanding |  | 93.2 |  |  | 93.7 |
Effect of dilutive securities |  | — |  |  | 0.2 |
Diluted shares |  | 93.2 |  |  | 93.9 |
Earnings per share: |  |  |  |
Basic |  | $ | (2.32 | ) |  | $ | 1.52 |
Diluted |  | $ | (2.32 | ) |  | $ | 1.51 |
Potentially dilutive securities whose effect would have been antidilutive are excluded from the computation of diluted earnings per share. Accounting Pronouncements In July 2015, the FASB issued ASU No. 2015-11, "Simplifying the Measurement of Inventory." ASU No. 2015-11 requires inventory that is recorded using the first-in, first-out method to be measured at the lower of cost or net realizable value. ASU No. 2015-11 was effective retrospectively for Adient for the quarter ending December 31, 2017. The adoption of this guidance did not have an impact on Adient's consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-07, "Investments-Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting." ASU No. 2016-07 eliminates the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retrospectively. ASU No. 2016-07 was effective prospectively for Adient for increases in the level of ownership interest or degree of influence that result in the adoption of the equity method that occur during or after the quarter ending December 31, 2017. The adoption of this guidance did not impact Adient's consolidated financial statements for the quarter ending December 31, 2017. In October 2016, the FASB issued ASU No. 2016-17, "Consolidation (Topic 810): Interests Held through Related Parties That Are under Common Control." ASU No. 2016-17 changes the evaluation of whether a reporting entity is the primary beneficiary of a Variable Interest Entity (VIE) by changing how a reporting entity that is a single decision maker of a VIE treats indirect interests in the entity held through related parties that are under common control with the reporting entity. ASU No. 2016-17 was effective for Adient for the quarter ended December 31, 2017. The adoption of this guidance did not have an impact on Adient's consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)." ASU No. 2014-09 clarifies the principles for recognizing revenue when an entity either enters into a contract with customers to transfer goods or services or enters into a contract for the transfer of non-financial assets. In March 2016 the FASB issued ASU No. 2016-08, "Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)," in April 2016 the FASB issued ASU No. 2016-10, "Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing," and in May 2016 the FASB issued ASU No. 2016-12, ‘‘Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients,’’which provide additional clarification on certain topics addressed in ASU No. 2014-09. ASU No. 2016-08, ASU No. 2016-10 and ASU No. 2016-12 follow the same implementation guidelines as ASU No. 2014-09 and ASU No. 2015-14. This guidance will be effective October 1, 2018 for Adient. The accounting changes under the new standard will require new processes and procedures to collect the data required for proper reporting and disclosure. Adient is undergoing its review of the impact of adopting this standard and is developing and executing an implementation plan which will include changes to internal processes and controls. Under current guidance Adient generally recognizes revenue when products are shipped and risk of loss has transferred to the customer. Under the new standard, the customized nature of some of Adient's products combined with contractual provisions that provide an enforceable right to payment, will likely require Adient to recognize revenue prior to the product being shipped to the customer. Adient is also assessing pricing provisions contained in certain customer contracts. It is possible that pricing provisions contained in some of Adient's customer contracts may provide the customer with a material right, potentially resulting in a different allocation of the transaction price than under current guidance. Adient expects to expand disclosures in line with the requirements of the new standard. Adient anticipates applying the modified retrospective method which would require Adient to recognize the cumulative effect of initially applying the standard as an adjustment to opening retained earnings at the date of initial application.

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