Summary
Amgen Inc. (AMGN) filed this 8-K to announce the retrospective adoption of two new accounting standards: ASU 2015-03 regarding debt issuance costs and ASU 2016-09 concerning employee share-based payment accounting. These changes primarily affect the presentation of financial information, not the underlying business operations or financial health of the company. For investors, the key takeaway is that certain line items in prior financial statements, specifically within the 2015 Form 10-K, are being recast to comply with these updated accounting rules. Debt issuance costs will now be presented as a direct reduction of debt liabilities on the balance sheet, and aspects of share-based payment accounting, particularly tax benefits/deficiencies and cash payments related to withholding taxes, will be reclassified within the statement of cash flows. Investors should refer to the updated exhibits for the precise financial statement impact.
Key Highlights
- 1Amgen is retrospectively adopting ASU 2015-03, which changes the presentation of debt issuance costs from an asset to a direct deduction from debt liabilities.
- 2Amgen is retrospectively adopting ASU 2016-09, impacting the classification of items related to employee share-based payments in the statement of cash flows.
- 3Excess income tax benefits and deficiencies from share-based payments will now be classified under operating activities (previously financing).
- 4Cash paid for withholding taxes on share-based payments will now be classified under financing activities (previously operating).
- 5This filing recasts certain sections of the 2015 Form 10-K, including Selected Financial Data, MD&A, Market Risk Disclosures, Financial Statements, and Controls and Procedures.
- 6The purpose is to comply with new accounting standards, not to report new business events or changes in financial performance.
- 7Investors should consult the attached exhibits for the specific financial statement impacts of these accounting standard adoptions.