Wal-Mart is a multinational retail company that operates which operates a chain of discount stores and super markets. The company is listed in New York Stock Exchange and is headquartered in Arkansas, US. The operations of the company are divided into three reportable segments: Wal-Mart US, Wal-Mart International and Sam’s Club.
The company implemented an update of accounting standard ‘Reporting Discontinued Operations and Disclosures of Components of an Entity’. The Financial Accounting Standards Boards issued this update on April 2014. This update provides the guidance for the recognition of discontinued operations and also changed the reporting requirements for discontinued operations. Moreover, additional disclosures were about discontinued operations were also implemented.
Wal-Mart adopted the accounting standards update (ASU) in fiscal year ended January 31st, 2015. The company’s management evaluated that adoption of update did not had any material impact on the company’s consolidated net income, consolidated statement of financial position or cash flows (Flood, 2014).
Since the discontinued operations of Wal-Mart included non-controlling interest, it was required by the update to disclose the profit attributable to the parents for the period in which the result of operations of discontinued operations are presented in the statement of shareholders equity.
The company included the disclosure of redeemable non-controlling interest in its consolidated statement of shareholders equity and Redeemable non-controlling interest as a separate column. Following the update, the company disclosed the redeemable non-controlling interest of $1491 million, which was purchased in 2014 (Annual Report 2014: Wal-Mart, 2014).
FASB issued another update in May 2014 for ‘Revenue from Contracts with Customers’. This update provided a new revenue recognition model that requires the company to recognize revenue from the goods or services at an amount that it expects to receive in exchange for such goods or services. The company has decided to adopt this new update from February 1, 2017, since the adoption earlier than December 15, 2016, is not allowed by FASB.
References
Annual Report 2014: Wal-Mart. (2014). Arkansas: Wal-Mart.
Flood, J. M. (2014). Wiley GAAP 2015: Interpretation and Application of Generally Accepted Accounting Principles 2015. Hoboken: John Wiley & Sons.
