DEVIATIONS FROM US GAAP Clause Samples

DEVIATIONS FROM US GAAP. 1. Prior to the fiscal year 2016, the Seller's Group failed to capitalize internal labor costs related to the development of software for internal use; these costs were expensed as incurred. 2. Prior to the fiscal year 2016, the Group Companies classified "free" products (also known as premiums) given to a customer in connection with a sales transaction as Marketing expenses. Beginning in 2016, the Group Companies classify the cost of these items in Cost of Goods Sold. This issue impacts the classification of costs on the combined statement of income; there is no impact on operating or net income for this change in classification. 3. Prior to the fiscal year 2014, sales of postage stamps were recorded gross by some Group Companies; beginning in 2014, all Group Companies recognize the sale of these goods on a net basis. This issue impacts classification of sales and cost of goods sold on the combined statement of income; there is no impact to gross profit, operating income or net income for this change in classification. 4. The Group Companies do not all consistently recognize revenue for the sale of product upon delivery; some recognize revenue upon shipment. 5. The Group Companies do not all consistently recognize an estimate of sales returns upon the initiation of the sale; some recognize returns only when actually received. 6. Upon signing the agreement to consummate the transaction, US GAAP will require a change in the classification or measurement of certain assets and liabilities. This change in classification will impact fixed assets and pension liabilities. For purposes of presenting the Historical Financial Statements and the Completion Accounts, these changes in classification will not be reflected in the underlying financial statements (so the statements will be presented on a basis that is comparable to historical periods).