Coca Cola 2013 Annual Report Download - page 83

Assets and Liabilities Held for Sale
Our Company classifies long-lived assets (disposal groups) to be sold as held for sale in the period in which all of the following
criteria are met: management, having the authority to approve the action, commits to a plan to sell the asset (disposal group); the
asset (disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary
for sales of such assets (disposal groups); an active program to locate a buyer and other actions required to complete the plan to
sell the asset (disposal group) have been initiated; the sale of the asset (disposal group) is probable, and transfer of the asset
(disposal group) is expected to qualify for recognition as a completed sale within one year, except if events or circumstances
beyond our control extend the period of time required to sell the asset (disposal group) beyond one year; the asset (disposal
group) is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and actions required to
complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.
We initially measure a long-lived asset (disposal group) that is classified as held for sale at the lower of its carrying value or fair
value less any costs to sell. Any loss resulting from this measurement is recognized in the period in which the held-for-sale criteria
are met. Conversely, gains are not recognized on the sale of a long-lived asset (disposal group) until the date of sale. We assess
the fair value of a long-lived asset (disposal group) less any costs to sell each reporting period it remains classified as held for sale
and report any subsequent changes as an adjustment to the carrying value of the asset (disposal group), as long as the new
carrying value does not exceed the carrying value of the asset at the time it was initially classified as held for sale.
Upon determining that a long-lived asset (disposal group) meets the criteria to be classified as held for sale, the Company reports
the assets and liabilities of the disposal group, if material, in the line items assets held for sale and liabilities held for sale,
respectively, in our consolidated balance sheet.
Revenue Recognition
Our Company recognizes revenue when persuasive evidence of an arrangement exists, delivery of products has occurred, the sales
price charged is fixed or determinable, and collectibility is reasonably assured. For our Company, this generally means that we
recognize revenue when title to our products is transferred to our bottling partners, resellers or other customers. In particular,
title usually transfers upon shipment to or receipt at our customers’ locations, as determined by the specific sales terms of the
transactions. Our sales terms do not allow for a right of return except for matters related to any manufacturing defects on our
part.
Deductions from Revenue
Our customers can earn certain incentives including, but not limited to, cash discounts, funds for promotional and marketing
activities, volume-based incentive programs and support for infrastructure programs. The costs associated with these incentives are
included in deductions from revenue, a component of net operating revenues in our consolidated statements of income. For
customer incentives that must be earned, management must make estimates related to the contractual terms, customer
performance and sales volume to determine the total amounts earned and to be recorded in deductions from revenue. In making
these estimates, management considers past results. The actual amounts ultimately paid may be different from our estimates.
In some situations, the Company may determine it to be advantageous to make advance payments to specific customers to fund
certain marketing activities intended to generate profitable volume and/or invest in infrastructure programs with our bottlers that
are directed at strengthening our bottling system and increasing unit case volume. The Company also makes advance payments to
certain customers for distribution rights. The advance payments made to customers are initially capitalized and included in our
consolidated balance sheets in prepaid expenses and other assets and noncurrent other assets, depending on the duration of the
agreements. The assets are amortized over the applicable periods and included in deductions from revenue. The duration of these
agreements typically ranges from 4 to 10 years.
Amortization expense for infrastructure programs was $69 million, $86 million and $90 million in 2013, 2012 and 2011, respectively.
The aggregate deductions from revenue recorded by the Company in relation to these programs, including amortization expense
on infrastructure programs, were $6.9 billion, $6.1 billion and $5.8 billion in 2013, 2012 and 2011, respectively.
Advertising Costs
Our Company expenses production costs of print, radio, television and other advertisements as of the first date the advertisements
take place. All other marketing expenditures are expensed in the annual period in which the expenditure is incurred. Advertising
costs included in the line item selling, general and administrative expenses in our consolidated statements of income were
$3.3 billion, $3.3 billion and $3.3 billion in 2013, 2012 and 2011, respectively. As of December 31, 2013 and 2012, advertising and
production costs of $363 million and $295 million, respectively, were primarily recorded in the line item prepaid expenses and
other assets in our consolidated balance sheets.
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