GE 2015 Annual Report Download - page 164

FINANCIAL STATEMENTS PRESENTATION & POLICIES
136 GE 2015 FORM 10-K
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
CONSOLIDATION
Our financial statements consolidate all of our affiliates ± entities in which we have a controlling financial interest, most often because
we hold a majority voting interest. To determine if we hold a controlling financial interest in an entity, we first evaluate if we are required
to apply the variable interest entity (VIE) model to the entity, otherwise, the entity is evaluated under the voting interest model.
Where we hold current or potential rights that give us the power to direct the activities of a VIE that most significantly imSDFWWKH9,(¶V
economic performance, combined with a variable interest that gives us the right to receive potentially significant benefits or the
obligation to absorb potentially significant losses, we have a controlling financial interest in that VIE. Rights held by others to remove
the party with power over the VIE are not considered unless one party can exercise those rights unilaterally. When changes occur to
the design of an entity, we reconsider whether it is subject to the VIE model. We continuously evaluate whether we have a controlling
financial interest in a VIE.
We hold a controlling financial interest in other entities where we currently hold, directly or indirectly, more than 50% of the voting rights
or where we exercise control through substantive participating rights or as a general partner. Where we are a general partner, we
consider substantive removal rights held by other partners in determining if we hold a controlling financial interest. We reevaluate
whether we have a controlling financial interest in these entities when our voting or substantive participating rights change.
Associated companies are unconsolidated VIEs and other entities in which we do not have a controlling financial interest, but over
which we have significant influence, most often because we hold a voting interest of 20% to 50%. Associated companies are accounted
for as equity method investments. Results of associated companies are presented on a one-line basis. Investments in, and advances
to, associated companies are presented on a one-OLQHEDVLVLQWKHFDSWLRQ³$OORWKHUDVVHWV´LQRXU6WDWHPHQWRI)LQDQFLDO3RVLWLRQ, net
of allowance for losses, which represents our best estimate of probable losses inherent in such assets.
FINANCIAL STATEMENT PRESENTATION
We have reclassified certain prior-year amounts to conform to the current-\HDU¶VSUHVHQWDWLRQ Certain columns and rows may not add
due to the use of rounded numbers. Percentages presented are calculated from the underlying numbers in millions.
Upon closing an acquisition, we consolidate the acquired business as soon as practicable. The size, scope and complexity of an
acquisition can afIHFWWKHWLPHQHFHVVDU\WRDGMXVWWKHDFTXLUHGFRPSDQ\¶VDFFRXQWLQJSROLFLHVSURFHGXUHVDQGERRNVDQGUHFRUGVWR
our standards. Accordingly, it is possible that changes will be necessary to the carrying amounts and presentation of assets and
liabilities in our financial statements as the acquired company is fully assimilated.
Financial data and related measurements are presented in the following categories:
GE. This represents the adding together of all affiliates other than GE Capital, whose continuing operations are presented on a one-line
basis, giving effect to the elimination of transactions among such affiliates.
GE Capital. This refers to General Electric Capital Corporation (GECC), or its successor GE Capital Global Holdings, LLC (GECGH),
and is the adding together of all affiliates of GE Capital giving effect to the elimination of transactions among such affiliates.
Consolidated. This represents the adding together of GE and GE Capital, giving effect to the elimination of transactions between GE
and GE Capital.
Operating Segments. These comprise our nine businesses, focused on the broad markets they serve: Power, Renewable Energy, Oil
& Gas, Energy Management, Aviation, Healthcare, Transportation, Appliances & Lighting and Capital.
136 GE 2015 FORM 10-K