Summary
Marsh & McLennan Companies, Inc. (MRSH) has filed a Current Report on Form 8-K to disclose retrospective reclassifications of its financial information for the fiscal year ended December 31, 2017. These changes are a result of adopting updated accounting guidance under ASC Topic 715, effective January 1, 2018. The primary impact is on the presentation of net periodic pension and postretirement benefit costs. Specifically, the service cost component will now be reported alongside other compensation costs in the income statement, while other components will be presented separately from operating income.
Key Highlights
- 1Marsh & McLennan Companies (MRSH) is retrospectively reclassifying its 2017 financial statements.
- 2The reclassification is due to the adoption of updated accounting guidance (ASC Topic 715) for pension and postretirement benefit costs, effective January 1, 2018.
- 3The service cost component of net periodic benefit costs will now be presented within other compensation costs on the income statement.
- 4Other components of net periodic benefit costs will be reported separately from income from operations.
- 5This change impacts line item presentation but does not alter pre-tax income, net income, or earnings per share.
- 6The filing incorporates by reference Exhibit 99.1, which contains revised sections of the 2017 Form 10-K, including Selected Financial Data, MD&A, and Financial Statements.
Frequently Asked Questions
The company is filing this 8-K to make retrospective reclassifications to its previously reported financial statements for the fiscal year ended December 31, 2017. This is to comply with new accounting guidance (ASC Topic 715) regarding the presentation of net periodic pension and postretirement benefit costs.
The change primarily affects how certain benefit costs are presented on the income statement. While the service cost component will be grouped with other compensation costs, and other components will be shown separately from operating income, the overall financial impact on income before taxes, net income, and earnings per share is nil.
No, this filing is purely a change in accounting presentation based on updated standards. It does not reflect any new operational performance issues or changes in the company's underlying financial health or profitability.
The revised financial information, specifically updates to Item 6 (Selected Financial Data), Item 7 (Management's Discussion and Analysis), and Item 8 (Financial Statements and Supplementary Data) of the company's 2017 Form 10-K, is included via Exhibit 99.1, which is incorporated by reference in this 8-K filing.