Quarterly report pursuant to Section 13 or 15(d)

Recently Adopted and Issued Accounting Standards (Tables)

v3.5.0.2
Recently Adopted and Issued Accounting Standards (Tables)
 6 Months Ended
Jul. 02, 2016
Impact of Adopting New Accounting Guidance on Classification of Debt Issuance Costs, Deferred Income Taxes and Consolidated Statement of Cash Flows

The impact of adopting the new accounting guidance on classification of debt issuance costs and deferred income taxes on VF’s June 2015 Consolidated Balance Sheet is as follows:

 

In thousands

Balance Sheet Line Item

    June 2015
Consolidated
Balance Sheet
(As Previously Reported)(a) 		     Reclassification of Debt
Issuance Costs
Increase (Decrease) 		     Reclassification of
Deferred Income Taxes
Increase (Decrease) 		     June 2015
Consolidated
Balance Sheet
(Reclassified) 		 

Other current assets

    $ 596,240       $ —         $ (152,787 )     $ 443,453   

Other assets

      638,370         (10,691 )       34,889         662,568   

Accrued liabilities

      772,539         —           (6,092 )       766,447   

Long-term debt

      1,412,244         (10,691 )       —           1,401,553   

Other liabilities

      1,061,932         —           (111,806 )       950,126   

 

(a)  Excludes assets and liabilities of the Contemporary Brands coalition, which have been classified as held for sale on VF’s Consolidated Balance Sheets for all periods presented.

In March 2016, the FASB issued an update to their accounting guidance on stock compensation that intends to simplify and improve the accounting and statement of cash flow presentation for income taxes at settlement, forfeitures, and net settlements for withholding tax. The new standard is effective in the first quarter of 2017 with early adoption permitted. The Company early adopted this guidance as of the beginning of the first quarter of 2016. Accordingly, VF recognized $1.8 million and $17.6 million of excess tax benefits in our provision for income taxes, rather than paid-in capital, for the second quarter and first six months of 2016, respectively. Also starting in the first quarter of 2016, the Company changed its earnings per share calculation to exclude excess tax benefits previously assumed under the treasury stock method, which had a minimal impact on diluted shares. The Company has elected to continue its existing practice of estimating expected forfeitures in determining compensation cost. VF did not have any awards that were subject to the amendment regarding employee shares eligible for tax withholding, and no changes were required related to the classification of employee taxes paid for withheld shares on the statement of cash flows since VF has historically classified these within financing cash flows.

The Company began to present excess tax benefits as an operating cash flow in the first quarter of 2016 as required by the updated guidance, and elected to retrospectively adjust its first six months of 2015 operating and financing cash flows, as follows:

 

In thousands

Statement of Cash Flows

    June 2015
Consolidated Statement of
Cash Flows
(As Previously Reported) 		     Reclassification of Tax
Benefits of  Stock-based
Compensation
Increase (Decrease) 		     June 2015
Consolidated Statement of
Cash Flows (Reclassified) 		 

Cash used by operating activities

    $ (286,446 )     $ 33,728       $ (252,718 ) 

Cash provided by financing activities

      169,859         (33,728 )       136,131