GE 2014 Annual Report Download - page 157

GE 2014 FORM 10-K 137
FINANCIAL STATEMENTS PRESENTATION & POLICIES
FINANCIAL STATEMENT PRESENTATION
We have reclassified certain prior-year amounts to conform to the current-year’s presentation.
Financial data and related measurements are presented in the following categories:
GE. This represents the adding together of all affiliates other than General Electric Capital Corporation (GECC), whose
continuing operations are presented on a one-line basis, giving effect to the elimination of transactions among such affiliates.
GECC. This represents the adding together of all affiliates of GECC, giving effect to the elimination of transactions among
such affiliates.
Consolidated. This represents the adding together of GE and GECC, giving effect to the elimination of transactions between
GE and GECC.
Operating Segments. These comprise our eight businesses, focused on the broad markets they serve: Power & Water, Oil &
Gas, Energy Management, Aviation, Healthcare, Transportation, Appliances & Lighting and GE Capital.
Unless otherwise indicated, information in these notes to consolidated financial statements relates to continuing operations.
Certain of our operations have been presented as discontinued. See Note 2.
The effects of translating to U.S. dollars the financial statements of non-U.S. affiliates whose functional currency is the local
currency are included in shareowners’ equity. Asset and liability accounts are translated at year-end exchange rates, while
revenues and expenses are translated at average rates for the respective periods.
Preparing financial statements in conformity with GAAP requires us to make estimates based on assumptions about current,
and for some estimates future, economic and market conditions (for example, unemployment, market liquidity, the real estate
market, etc.), which affect reported amounts and related disclosures in our financial statements. Although our current
estimates contemplate current conditions and how we expect them to change in the future, as appropriate, it is reasonably
possible that in 2015 actual conditions could be worse than anticipated in those estimates, which could materially affect our
results of operations and financial position. Among other effects, such changes could result in future impairments of
investment securities, goodwill, intangibles and long-lived assets, incremental losses on financing receivables, establishment
of valuation allowances on deferred tax assets and increased tax liabilities.
SALES OF GOODS AND SERVICES
We record all sales of goods and services only when a firm sales agreement is in place, delivery has occurred or services
have been rendered and collectability of the fixed or determinable sales price is reasonably assured.
Arrangements for the sale of goods and services sometimes include multiple components. Most of our multiple component
arrangements involve the sale of goods and services in the Healthcare segment. Our arrangements with multiple components
usually involve an upfront deliverable of large machinery or equipment and future service deliverables such as installation,
commissioning, training or the future delivery of ancillary products. In most cases, the relative values of the undelivered
components are not significant to the overall arrangement and are typically delivered within three to six months after the core
product has been delivered. In such agreements, selling price is determined for each component and any difference between
the total of the separate selling prices and total contract consideration (i.e., discount) is allocated pro rata across each of the
components in the arrangement. The value assigned to each component is objectively determined and obtained primarily from
sources such as the separate selling price for that or a similar item or from competitor prices for similar items. If such evidence
is not available, we use our best estimate of selling price, which is established consistent with the pricing strategy of the
business and considers product configuration, geography, customer type, and other market specific factors.