GE 2015 Annual Report Download - page 121

MD&A OTHER ITEMS
GE 2015 FORM 10-K 93
OTHER ITEMS
NEW ACCOUNTING STANDARDS
In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from
Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer
of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in GAAP when it
becomes effective. In July 2015, the FASB approved a one-year deferral of this standard, with a revised effective date for fiscal years
beginning after December 15, 2017. Early adoption is permitted, although not prior to fiscal years beginning after December 15, 2016.
The standard permits the use of either the retrospective or modified retrospective (cumulative effect) transition method. We are
evaluating the effect that ASU 2014-09 will have on our consolidated financial statements and related disclosures. We have not yet
selected a transition method and continue to evaluate the effect of the standard on our ongoing financial reporting.
In February 2015, the FASB issued ASU 2015-02, Amendments to the Consolidation Analysis. The ASU amends the consolidation
guidance for VIEs and general partners' investments in limited partnerships and modifies the evaluation of whether limited partnerships
and similar legal entities are VIEs or voting interest entities. Upon adoption of the amendment on January 1, 2016, we will
deconsolidate certain entities where we no longer meet the definition of primary beneficiary under the revised guidance. The effect of
deconsolidation on total assets and liabilities, net of our investment in these entities, is expected to be immaterial. We do not expect to
consolidate any incremental entities as a result of adoption. As a result of the modified evaluation of whether limited partnerships and
similar legal entities are VIEs or voting interest entities, we will have incremental disclosure of unconsolidated VIEs.
In September 2015, the FASB issued ASU 2015-16, Simplifying the Accounting for Measurement-Period Adjustments. The ASU
eliminates the requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively.
The ASU is effective for interim and annual reporting periods beginning after December 15, 2015, with early adoption permitted. The
effect that the ASU will have on our consolidated financial statements will be dependent upon any measurement-period adjustments
identified in future periods.
ENVIRONMENTAL MATTERS
Our operations, like operations of other companies engaged in similar businesses, involve the use, disposal and cleanup of substances
regulated under environmental protection laws. We are involved in a number of remediation actions to clean up hazardous wastes as
required by federal and state laws. Such statutes require that responsible parties fund remediation actions regardless of fault, legality of
original disposal or ownership of a disposal site. Expenditures for site remediation actions amounted to approximately $0.3 billion in
2015 and approximately $0.4 billion in each of the years 2014 and 2013. We presently expect that such remediation actions will require
average annual expenditures of about $0.3 billion in 2016 and $0.2 billion in 2017.
In 2006, we entered into a consent decree with the Environmental Protection Agency (EPA) to dredge PCB-containing sediment from
the upper Hudson River. The consent decree provided that the dredging would be performed in two phases. Phase 1 was completed in
May through November of 2009. Following Phase 1, the EPA conducted a peer review of the project, made modifications and GE
agreed to perform Phase 2. We increased our reserve by $0.8 billion in the fourth quarter of 2010 to account for the probable and
estimable costs of completing Phase 2. Between 2012 and 2015, GE completed Phase 2 and the EPA confirms that all dredging has
been performed in accordance with the aforementioned consent decree. As of December 31, 2015, the company retains sufficient
reserves to address remaining operations and management obligations required for all post-dredging work.
As previously reported, in 2000, GE and the EPA entered into a consent decree relating to PCB cleanup of the Housatonic River in
Massachusetts. In 2012, the EPA issued a status report describing potential conceptual approaches to a 10-mile stretch of the river
downstream from a previously remediated area. In September 2015, the EPA released an intended final decision for the so called ³5HVW
of 5LYHU´ This is not the EPA's final decision, rather, the consent decree provides for discussions and a detailed dispute resolution
process between GE and the EPA, after which the EPA will issue its final decision. As of December 31, 2015, and based on its
assessment of current facts and circumstances, GE believes that it has recorded adequate reserves to cover future obligations
associated with an expected final remedy.
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