Coca Cola 2015 Annual Report Download - page 83

Summary of Significant Accounting Policies
Basis of Presentation
Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). The
preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities,
revenues and expenses and the disclosure of contingent assets and liabilities in our consolidated financial statements and accompanying notes. Although
these estimates are based on our knowledge of current events and actions we may undertake in the future, actual results may ultimately differ from these
estimates and assumptions. Furthermore, when testing assets for impairment in future periods, if management uses different assumptions or if different
conditions occur, impairment charges may result.
We use the equity method to account for investments in companies, if our investment provides us with the ability to exercise significant influence over
operating and financial policies of the investee. Our consolidated net income includes our Company's proportionate share of the net income or loss of these
companies. Our judgment regarding the level of influence over each equity method investment includes considering key factors such as our ownership
interest, representation on the board of directors, participation in policy-making decisions and material intercompany transactions.
We eliminate from our financial results all significant intercompany transactions, including the intercompany transactions with consolidated variable interest
entities ("VIEs") and the intercompany portion of transactions with equity method investees.
Principles of Consolidation
Our Company consolidates all entities that we control by ownership of a majority voting interest as well as VIEs for which our Company is the primary
beneficiary. Generally, we consolidate only business enterprises that we control by ownership of a majority voting interest. However, there are situations in
which consolidation is required even though the usual condition of consolidation (ownership of a majority voting interest) does not apply. Generally, this
occurs when an entity holds an interest in another business enterprise that was achieved through arrangements that do not involve voting interests, which
results in a disproportionate relationship between such entity's voting interests in, and its exposure to the economic risks and potential rewards of, the other
business enterprise. This disproportionate relationship results in what is known as a variable interest, and the entity in which we have the variable interest is
referred to as a "VIE." An enterprise must consolidate a VIE if it is determined to be the primary beneficiary of the VIE. The primary beneficiary has both
(1) the power to direct the activities of the VIE that most significantly impact the entity's economic performance, and (2) the obligation to absorb losses or the
right to receive benefits from the VIE that could potentially be significant to the VIE.
Our Company holds interests in certain VIEs, primarily bottling and container manufacturing operations, for which we were not determined to be the primary
beneficiary. Our variable interests in these VIEs primarily relate to profit guarantees or subordinated financial support. Refer to Note 11. Although these
financial arrangements resulted in our holding variable interests in these entities, they did not empower us to direct the activities of the VIEs that most
significantly impact the VIEs' economic performance. Our Company's investments, plus any loans and guarantees, related to these VIEs totaled
$2,687 million and $2,274 million as of December 31, 2015 and 2014, respectively, representing our maximum exposures to loss. The Company's
investments, plus any loans and guarantees, related to these VIEs were not significant to the Company's consolidated financial statements.
In addition, our Company holds interests in certain VIEs, primarily bottling and container manufacturing operations, for which we were determined to be the
primary beneficiary. As a result, we have consolidated these entities. Our Company's investments, plus any loans and guarantees, related to these VIEs totaled
$221 million and $266 million as of December 31, 2015 and 2014, respectively, representing our maximum exposures to loss. The assets and liabilities of
VIEs for which we are the primary beneficiary were not significant to the Company's consolidated financial statements.
Creditors of our VIEs do not have recourse against the general credit of the Company, regardless of whether they are accounted for as consolidated entities.
Assets and Liabilities Held for Sale
Our Company classifies long-lived assets or 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 or disposal group; the asset or 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 or disposal groups; an active program to
locate a buyer and other actions required to complete the plan to sell the asset or disposal group have been initiated; the sale of the asset or disposal group is
probable, and transfer of the asset or 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 or disposal group beyond one year; the asset or disposal group is being
actively marketed for sale at a price that is reasonable in relation to its current fair
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