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Revisions of Previously Issued Financial Statements | 6 Months Ended
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Jun. 30, 2020
Accounting Changes and Error Corrections [Abstract] |
Revisions of Previously Issued Financial Statements | 2. REVISIONS OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS During 2020, the Company determined there were errors in its previously issued Consolidated Statements of Cash Flows related to the business activities that commenced upon the acquisition of JetPay Corporation (JetPay) in December 2018. As a result of these errors, the Company's cash, cash equivalents and restricted cash within the Consolidated Statement of Cash Flows for the years ended December 31, 2019 and 2018 and within the Condensed Consolidated Statement of Cash Flows for the interim periods in fiscal 2019 and for the three months ended March 31, 2020, were understated. This also resulted in misclassifications of activities between net cash from operations, investing, and financing activities in each of the periods noted above. More specifically, the Company determined: (i) the funds held for clients represent cash balances that, based upon the Company's intent, are restricted solely for the purposes of satisfying the obligations to remit funds relating to the Company's payroll and payroll tax filing services, which are classified as client fund obligations; and (ii) there are restricted cash balances included within settlement processing assets that are not yet due to the merchants. Such funds are held in a fiduciary duty, and are not available for the Company to use to fund its cash requirements. As a result, (i) the business acquisition purchase price upon the acquisition of JetPay should have been reflected net of these cash balances and (ii) the restricted cash in all periods should have been presented within cash, cash equivalents and restricted cash within the Consolidated Statement of Cash Flows. Additionally, the Company determined the presentation of the cash inflow or outflow from client fund obligations should be reflected within financing activities rather than within operating activities beginning in the third quarter of 2019 and through December 31, 2019. However, in analyzing the impact of the change to include funds held for clients within cash, cash equivalents and restricted cash, it was determined the cash inflow or outflow from client funds obligations was incorrect. The Company assessed the materiality of these errors on the prior period financial statements in accordance with SEC Staff Bulletin No. 99, Materiality, codified in ASC Topic 250, Accounting Changes and Error Corrections. Based on this assessment, the Company determined the impact from these errors was not material to its previously filed annual or interim financial statements. The corrections had no impact on the Company's Consolidated Statements of Income, Consolidated Statements of Comprehensive Income or Consolidated Balance Sheets in previously issued annual or interim financial statements. However, the Company has determined that it will revise its previously issued annual and interim financial statements to correct these errors within the Consolidated Statements of Cash Flows. The revision for the Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2019 is reflected within the accompanying Condensed Consolidated Financial Statements and the details for the revision for all periods are presented below. The Company will effect such revisions to its Consolidated Statements of Cash Flows for the years ended December 31, 2019 and 2018 in connection with the future filing of its 2020 Annual Report on Form 10-K, which contain these comparative periods and will effect the revisions for the three months ended March 31, 2020 and the nine months ended September 30, 2019 in connection with the future filings of its Form 10-Q which contain these comparative periods. In addition, in the previously issued unaudited interim financial statements for the three months ended March 31, 2020, the Company revised its beginning and ending cash, cash equivalents and restricted cash balances for the three months ended March 31, 2020 and 2019, which corrected for certain errors that were known at the time of such filing. The appropriate changes are reflected in our Condensed Consolidated Statement of Cash Flows and the corrections are reflected in the tables below:
| For the year ended December 31, 2018 |  |  |  |
In millions | As Reported |  | Adjustment |  | As Revised
Business acquisitions, net | $ | (206) |  |  | $ | 46 |  |  | $ | (160) |
Net cash provided by (used in) investing activities | $ | (520) |  |  | $ | 46 |  |  | $ | (474) |
Net increase (decrease) in client obligations | $ | — |  |  | $ | 10 |  |  | $ | 10 |
Net cash provided by (used in) financing activities | $ | (58) |  |  | $ | 10 |  |  | $ | (48) |
Increase (decrease) in cash, cash equivalents and restricted cash | $ | (67) |  |  | $ | 56 |  |  | $ | (11) |
Cash, cash equivalents and restricted cash at the end of the period | $ | 476 |  |  | $ | 56 |  |  | $ | 532 |
| For the three months ended March 31, 2019 |  |  |  |  |  |  |  |
In millions | As Reported in March 31, 2019 Form 10-Q |  | Adjustment |  | As Revised in March 31, 2020 Form 10-Q |  | Further Adjustment |  | As Revised
Increase (decrease) in other assets and liabilities | $ | (10) |  |  | $ | — |  |  | $ | (10) |  |  | $ | — |  |  | $ | (10) |
Net cash provided by (used in) operating activities | $ | (16) |  |  | $ | — |  |  | $ | (16) |  |  | $ | — |  |  | $ | (16) |
Net increase (decrease) in client obligations | $ | — |  |  | $ | 17 |  |  | $ | 17 |  |  | $ | — |  |  | $ | 17 |
Net cash provided by (used in) financing activities | $ | 36 |  |  | $ | 17 |  |  | $ | 53 |  |  | $ | — |  |  | $ | 53 |
Increase (decrease) in cash, cash equivalents and restricted cash | $ | (53) |  |  | $ | 17 |  |  | $ | (36) |  |  | $ | — |  |  | $ | (36) |
Cash, cash equivalents and restricted cash at the beginning of the period | $ | 476 |  |  | $ | 46 |  |  | $ | 522 |  |  | $ | 10 |  |  | $ | 532 |
Cash, cash equivalents and restricted cash at the end of the period | $ | 423 |  |  | $ | 63 |  |  | $ | 486 |  |  | $ | 10 |  |  | $ | 496 |
| For the six months ended June 30, 2019 |  |  |  |
In millions | As Reported |  | Adjustment |  | As Revised
Cash, cash equivalents and restricted cash at the beginning of the period | $ | 476 |  |  | $ | 56 |  |  | $ | 532 |
Cash, cash equivalents and restricted cash at the end of the period | $ | 345 |  |  | $ | 56 |  |  | $ | 401 |
| For the nine months ended September 30, 2019 |  |  |  |
In millions | As Reported |  | Adjustment |  | As Revised
Net increase (decrease) in client funds | $ | (2) |  |  | $ | 2 |  |  | $ | — |
Net cash provided by (used in) investing activities | $ | (292) |  |  | $ | 2 |  |  | $ | (290) |
Net increase (decrease) in client obligations | $ | 2 |  |  | $ | (4) |  |  | $ | (2) |
Net cash provided by (used in) financing activities | $ | 33 |  |  | $ | (4) |  |  | $ | 29 |
Increase (decrease) in Cash, cash equivalents and restricted cash | $ | (67) |  |  | $ | (2) |  |  | $ | (69) |
Cash, cash equivalents and restricted cash at the beginning of the period | $ | 476 |  |  | $ | 56 |  |  | $ | 532 |
Cash, cash equivalents and restricted cash at the end of the period | $ | 409 |  |  | $ | 54 |  |  | $ | 463 |
| For the year ended December 31, 2019 |  |  |  |
In millions | As Reported |  | Adjustment |  | As Revised
Increase (decrease) in other assets and liabilities | $ | 2 |  |  | $ | 6 |  |  | $ | 8 |
Net cash provided by (used in) operating activities | $ | 628 |  |  | $ | 6 |  |  | $ | 634 |
Net increase (decrease) in client obligations | $ | (15) |  |  | $ | 15 |  |  | $ | — |
Net cash provided by (used in) investing activities | $ | (527) |  |  | $ | 15 |  |  | $ | (512) |
Net increase (decrease) in client obligations | $ | 15 |  |  | $ | (30) |  |  | $ | (15) |
Net cash provided by (used in) financing activities | $ | (31) |  |  | $ | (30) |  |  | $ | (61) |
Increase (decrease) in Cash, cash equivalents and restricted cash | $ | 40 |  |  | $ | (9) |  |  | $ | 31 |
Cash, cash equivalents and restricted cash at the beginning of the period | $ | 476 |  |  | $ | 56 |  |  | $ | 532 |
Cash, cash equivalents and restricted cash at the end of the period | $ | 516 |  |  | $ | 47 |  |  | $ | 563 |
| For the three months ended March 31, 2020 |  |  |  |
In millions | As Reported |  | Adjustment |  | As Revised
Increase (decrease) in other assets and liabilities | $ | (90) |  |  | $ | (7) |  |  | $ | (97) |
Net cash provided by (used in) operating activities | $ | 61 |  |  | $ | (7) |  |  | $ | 54 |
Increase (decrease) in Cash, cash equivalents and restricted cash | $ | 717 |  |  | $ | (7) |  |  | $ | 710 |
Cash, cash equivalents and restricted cash at the beginning of the period | $ | 548 |  |  | $ | 15 |  |  | $ | 563 |
Cash, cash equivalents and restricted cash at the end of the period | $ | 1,265 |  |  | $ | 8 |  |  | $ | 1,273 |
Consistent with the revision to the Consolidated Statement of Cash Flows described above, the Company has revised the reconciliation of cash, cash equivalents and restricted cash included in the Consolidated Statement of Cash Flows for all periods that include a revision. The appropriate changes are reflected in our Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2019, and the corrections, as reflected in the table below to include funds held for clients and cash included in settlement assets within cash, cash equivalents and restricted cash, will be revised in connection with the future Form 10-K and 10-Q filings discussed above.
In millions |  | March 31, 2020 |  | December 31, 2019 |  | September 30, 2019 |  | June 30, 2019 |  | March 31, 2019 |  | December 31, 2018
Reconciliation of cash, cash equivalents and restricted cash as shown in the Condensed Consolidated Statements of Cash Flows |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 1,214 |  |  | $ | 509 |  |  | $ | 388 |  |  | $ | 335 |  |  | $ | 414 |  |  | $ | 464 |
Restricted cash included in other assets |  | 7 |  |  | 7 |  |  | 21 |  |  | 10 |  |  | 9 |  |  | 12 |
Funds held for clients included in other current assets |  | 44 |  |  | 32 |  |  | 45 |  |  | 46 |  |  | 64 |  |  | 46 |
Cash included in settlement processing assets included in other current assets |  | 8 |  |  | 15 |  |  | 9 |  |  | 10 |  |  | 9 |  |  | 10 |
Total cash, cash equivalents and restricted cash |  | $ | 1,273 |  |  | $ | 563 |  |  | $ | 463 |  |  | $ | 401 |  |  | $ | 496 |  |  | $ | 532 |

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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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