Recent Accounting Pronouncements

Note 9: Recent Accounting Pronouncements

Revenue Recognition

In May 2014, the Financial Accounting Standards Board (“FASB”) updated the accounting guidance related to revenue recognition. The updated accounting guidance provides a single, contract-based revenue recognition model to help improve financial reporting by providing clearer guidance on when an entity should recognize revenue and by reducing the number of standards to which an entity has to refer. The core principle of the new standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services.

We adopted the updated guidance on January 1, 2018 on a full retrospective basis, which required us to reflect the impact of the updated guidance for all periods presented. Upon adoption, we also implemented changes in our presentation of certain revenues and expenses, primarily in our Cable Communications segment.

The adoption of the new standard did not have a material impact on our consolidated results of operations or financial position for any period presented. The updated guidance also requires additional disclosures regarding the nature, timing and uncertainty of our revenue transactions. See Note 3 for additional information.

The tables below present the effects on our consolidated statement of income and balance sheet for the prior year periods presented.



Consolidated Statement of Income
Year ended December 31, 2017 (in millions)	Previously Reported		Effects of Adoption		As Adjusted
Revenue	$	84,526	$	503	$	85,029
Total costs and expenses	$	66,539	$	472	$	67,011
Operating income	$	17,987	$	31	$	18,018
Net income attributable to Comcast Corporation	$	22,714	$	21	$	22,735



Year ended December 31, 2016 (in millions)	Previously Reported		Effects of Adoption			As Adjusted
Revenue	$	80,403	$	333		$	80,736
Total costs and expenses	$	63,544	$	361		$	63,905
Operating income	$	16,859	$	(28	)	$	16,831
Net income attributable to Comcast Corporation	$	8,695	$	(17	)	$	8,678



Consolidated Balance Sheet
December 31, 2017 (in millions)	Previously Reported		Effects of Adoption			As Adjusted
Total current assets	$	16,060	$	283		$	16,343
Film and television costs	$	7,076	$	11		$	7,087
Other intangible assets, net	$	18,779	$	(646	)	$	18,133
Other noncurrent assets, net	$	3,489	$	865		$	4,354
Total assets	$	186,949	$	513		$	187,462

Total current liabilities	$	21,561	$	432		$	21,993
Deferred income taxes	$	24,256	$	3		$	24,259
Other noncurrent liabilities	$	10,904	$	68		$	10,972
Total equity	$	69,449	$	10		$	69,459
Total liabilities and equity	$	186,949	$	513		$	187,462

Cable Communications

A summary of the changes implemented for the Cable Communications segment is presented below.

Changes to Presentation of Revenue and Related Costs


•	Revenue from our residential video services decreased with corresponding increases to high-speed internet and voice revenue due to a change in the allocation of revenue among our cable services included in a bundle that our residential customers purchase at a discount.


•	Revenue from franchise and other regulatory fees, which was previously presented in other revenue, is now presented with the corresponding cable services. This resulted in increases to video, voice and business services revenue.


•	Residential customer late fees are now presented in other revenue. These fees were previously presented as a reduction to other operating costs and expenses.

•

Certain costs, including costs related to the fulfillment of contracts with customers, are now presented as other assets and the related costs are recognized over time in operating costs and expenses, which are comprised of total costs and expenses, excluding depreciation and amortization expense and other operating gains. These amounts were previously presented as intangible assets, and the expenses were previously presented in amortization expense. The payments related to these assets are now presented in net cash provided by operating activities rather than in cash paid for intangible assets in our consolidated statement of cash flows.

Changes to the Timing of Recognition of Revenue and Related Costs

•

Revenue for upfront installation services that are not distinct and commission expenses are now recognized as revenue and operating costs and expenses, respectively, over a period of time rather than recognized immediately as they were previously. We recorded a deferred revenue liability related to upfront installation fees that are not distinct services, which required us to allocate the installation fees to the respective service. The installation fees are generally recognized as revenue over the period that the fee would influence a customer to renew their service. This period is less than a year for Cable Communications residential customers and the term of the related contract for business services customers. Incremental costs to obtain a contract with a customer, such as commissions for our business customers, are now deferred and recognized over the contract term. Sales commissions related to our Cable Communications residential customers are expensed as incurred as the related period of benefit is less than a year.

The tables below present the effects these changes had on our Cable Communications segment revenue, operating costs and expenses, and depreciation and amortization expense as a result of the adoption of updated guidance for the prior year periods. Previously reported amounts are based on amounts previously presented in the segment information footnote.



Year ended December 31, 2017 (in millions)	Previously Reported		Effects of Adoption			As Adjusted
Residential:
High-speed internet	$	14,769	$	912		$	15,681
Video	23,129		(255		)	22,874
Voice	3,391		699			4,090
Business services	6,216		221			6,437
Advertising	2,257		193			2,450
Other	2,757		(1,219		)	1,538
Total Cable Communications revenue	$	52,519	$	551		$	53,070
Operating costs and expenses	$	31,349	$	653		$	32,002
Depreciation and amortization expense	$	8,143	$	(137	)	$	8,006



Year ended December 31, 2016 (in millions)	Previously Reported		Effects of Adoption			As Adjusted
Residential:
High-speed internet	$	13,532	$	889		$	14,421
Video	22,357		(153		)	22,204
Voice	3,540		619			4,159
Business services	5,514		191			5,705
Advertising	2,476		150			2,626
Other	2,629		(1,167		)	1,462
Total Cable Communications revenue	$	50,048	$	529		$	50,577
Operating costs and expenses	$	29,939	$	624		$	30,563
Depreciation and amortization expense	$	7,670	$	(132	)	$	7,538

NBCUniversal Segments

The adoption of the updated guidance impacted the timing of recognition for some of our revenue contracts, primarily for content licensing agreements. As a result of the adoption of the updated guidance, when the term of an existing content licensing agreement is renewed or extended, revenue is not recognized until the date when the renewal or extension period begins. Under the prior guidance, revenue for the content licensing renewal period was recognized on the date that the renewal was agreed to contractually. This change resulted in delayed revenue recognition for content licensing renewals or extensions in our Cable Networks, Broadcast Television and Filmed Entertainment segments. This change also impacted the timing of the related amortization of our film and television costs and participations and residuals expenses. The adoption of the updated guidance did not have a material impact on the results of operations or financial position for the NBCUniversal segments.

Financial Assets and Financial Liabilities

In January 2016, the FASB updated the accounting guidance related to the recognition and measurement of financial assets and financial liabilities. The updated accounting guidance, among other things, requires that all nonconsolidated equity investments, except those accounted for under the equity method, be measured at fair value and the changes in fair value be recognized in net income. On January 1, 2018, we adopted the updated guidance prospectively along with a related clarifying update and as a result, we recorded an immaterial cumulative effect adjustment to retained earnings, accumulated other comprehensive income (loss) and investments. See Note 10 for additional information.

Restricted Cash

In November 2016, the FASB updated the accounting guidance related to restricted cash. The new standard requires that the statement of cash flows present the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents, and a reconciliation of that total to amounts presented on the balance sheet. We adopted the updated guidance on January 1, 2018 and as required applied the retrospective transition method. The adoption did not have a material impact for any period presented.

Leases

In February 2016, the FASB updated the accounting guidance related to leases. The updated accounting guidance requires lessees to recognize a right-of-use asset and a lease liability on the balance sheet for all leases with the exception of short-term leases. The asset and liability are initially measured based on the present value of committed lease payments. For a lessee, the recognition, measurement and presentation of expenses and cash flows arising from a lease do not significantly change from previous guidance. For a lessor, the accounting applied is also largely unchanged from previous guidance. We will adopt the updated accounting guidance in the first quarter of 2019 and prior periods will not be adjusted. We are currently in the process of determining the impact that the updated accounting will have on our consolidated financial statements. See Note 17 for a summary of our undiscounted minimum rental commitments under operating leases as of December 31, 2018.

Note 8: Recent Accounting Pronouncements

Revenue Recognition

We adopted the updated guidance on January 1, 2018 on a full retrospective basis, which required us to reflect the impact of the updated guidance for all periods presented.

The tables below present the effects on our consolidated statement of income and balance sheet for the prior year periods presented.



Consolidated Statement of Income
Year ended December 31, 2017 (in millions)	Previously Reported		Effects of Adoption			As Adjusted
Revenue	$	32,997	$	(47	)	$	32,950
Total costs and expenses	$	26,516	$	(43	)	$	26,473
Operating income	$	6,481	$	(4	)	$	6,477
Net income attributable to NBCUniversal	$	5,084	$	(4	)	$	5,080



Year ended December 31, 2016 (in millions)	Previously Reported		Effects of Adoption			As Adjusted
Revenue	$	31,593	$	(195	)	$	31,398
Total costs and expenses	$	26,171	$	(131	)	$	26,040
Operating income	$	5,422	$	(64	)	$	5,358
Net income attributable to NBCUniversal	$	4,235	$	(64	)	$	4,171



Consolidated Balance Sheet
December 31, 2017 (in millions)	Previously Reported		Effects of Adoption			As Adjusted
Total current assets	$	11,673	$	284		$	11,957
Film and television costs	$	7,071	$	11		$	7,082
Other noncurrent assets, net	$	1,872	$	(68	)	$	1,804
Total assets	$	71,073	$	227		$	71,300

Total current liabilities	$	9,602	$	330		$	9,932
Other noncurrent liabilities	$	4,109	$	44		$	4,153
Total equity	$	43,188	$	(147	)	$	43,041
Total liabilities and equity	$	71,073	$	227		$	71,300

Financial Assets and Financial Liabilities

In January 2016, the FASB updated the accounting guidance related to the recognition and measurement of financial assets and financial liabilities. The updated accounting guidance, among other things, requires that all nonconsolidated equity investments, except those accounted for under the equity method, be measured at fair value and the changes in fair value be recognized in net income. On January 1, 2018, we adopted the updated guidance prospectively along with a related clarifying update and as a result, we recorded a $232 million cumulative effect adjustment to member's capital and accumulated other comprehensive income (loss). See Note 9 for additional information.

Restricted Cash

Leases

In February 2016, the FASB updated the accounting guidance related to leases. The updated accounting guidance requires lessees to recognize a right-of-use asset and a lease liability on the balance sheet for all leases with the exception of short-term leases. The asset and liability are initially measured based on the present value of committed lease payments. For a lessee, the recognition, measurement and presentation of expenses and cash flows arising from a lease do not significantly change from previous guidance. For a lessor, the accounting applied is also largely unchanged from previous guidance. We will adopt the updated accounting guidance in the first quarter of 2019 and prior periods will not be adjusted. We are currently in the process of determining the impact that the updated accounting will have on our consolidated financial statements. See Note 14 for a summary of our undiscounted minimum rental commitments under operating leases as of December 31, 2018.