Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - Aon plc | ex991prq22018.htm |
| 8-K - 8-K - Aon plc | form8-kprq22018.htm |
Exhibit 99.2
Impact of Adopting ASC 606 on U.S. GAAP Financial Statements to the Second Quarter 2018
The Financial Accounting Standards Board issued a new accounting standard on revenue from contracts with customers (“ASC 606”), effective January 1, 2018, which supersedes nearly all existing revenue recognition guidance under U.S. GAAP.
The following tables summarize the impacts of adopting ASC 606 on the Company’s Condensed Consolidated Statement of Income, Financial Position, and Cash Flows as of and for the three and six months ended June 30, 2018.
Condensed Consolidated Statement of Income
Three months ended June 30, 2018 | Six months ended June 30, 2018 | |||||||||||||||||||||||
(millions) | As Reported | Adjustments | Balances Without Adoption of ASC 606 | As Reported | Adjustments | Balances Without Adoption of ASC 606 | ||||||||||||||||||
Revenue | ||||||||||||||||||||||||
Total revenue | $ | 2,561 | $ | 3 | $ | 2,564 | $ | 5,651 | $ | (410 | ) | $ | 5,241 | |||||||||||
Expenses | ||||||||||||||||||||||||
Compensation and benefits | $ | 1,494 | $ | (13 | ) | $ | 1,481 | $ | 3,110 | $ | (78 | ) | $ | 3,032 | ||||||||||
Other general expenses | $ | 535 | $ | 2 | 537 | $ | 853 | $ | 2 | 855 | ||||||||||||||
Other income (expense) | $ | (3 | ) | $ | (1 | ) | $ | (4 | ) | $ | (18 | ) | $ | — | $ | (18 | ) | |||||||
Income taxes | $ | (144 | ) | $ | 7 | $ | (137 | ) | $ | (30 | ) | $ | (75 | ) | $ | (105 | ) | |||||||
Adoption of ASC 606 had an unfavorable impact of $6 million on net income from continuing operations or $0.02 per share for the three months ended June 30, 2018, and a favorable impact of $259 million on net income from continuing operations or $1.05 per share for the six months ended June 30, 2018.
Condensed Consolidated Statement of Financial Position
As of June 30, 2018 | ||||||||||||
(millions) | As Reported | Adjustments | Balances Without Adoption of ASC 606 | |||||||||
Assets | ||||||||||||
Receivables, net | $ | 2,992 | $ | (657 | ) | $ | 2,335 | |||||
Other current assets | $ | 732 | $ | (216 | ) | $ | 516 | |||||
Deferred tax assets | $ | 452 | $ | 128 | $ | 580 | ||||||
Other non-current assets | $ | 404 | $ | (144 | ) | $ | 260 | |||||
Liabilities | ||||||||||||
Other current liabilities | $ | 1,121 | $ | (61 | ) | $ | 1,060 | |||||
Deferred tax liabilities | $ | 294 | $ | (71 | ) | $ | 223 | |||||
Other non-current liabilities | $ | 1,088 | $ | 1 | $ | 1,089 | ||||||
Equity | ||||||||||||
Total equity | $ | 4,618 | $ | (758 | ) | $ | 3,860 | |||||
Exhibit 99.2
Condensed Consolidated Statement of Cash Flows
Six months ended June 30, 2018 | ||||||||||||
(millions) | As Reported | Adjustments | Balances Without Adoption of ASC 606 | |||||||||
Cash flows from operating activities | ||||||||||||
Net income | $ | 668 | $ | (259 | ) | $ | 409 | |||||
Deferred income taxes | $ | (93 | ) | $ | (29 | ) | $ | (122 | ) | |||
Receivables, net | $ | (371 | ) | $ | 405 | $ | 34 | |||||
Accounts payable and accrued liabilities | $ | (495 | ) | $ | 8 | $ | (487 | ) | ||||
Current income taxes | $ | (144 | ) | $ | (46 | ) | $ | (190 | ) | |||
Other assets and liabilities | $ | 301 | $ | (79 | ) | $ | 222 | |||||
The adoption of ASC 606 had no impact on Cash Provided by Operating Activities.