GE 2015 Annual Report Download - page 167

FINANCIAL STATEMENTS PRESENTATION & POLICIES
GE 2015 FORM 10-K 139
SYNCHRONY FINANCIAL EXCHANGE OFFER
On August 5, 2014, we completed the initial public offering (IPO) of our North American Retail Finance business, Synchrony Financial,
as a first step in a planned, staged exit from that business:HUHFHLYHGQHWSURFHHGVIURPWKH,32DQG8QGHUZULWHU¶VOption of $2.8
billion and retained 84.6% of Synchrony Financial.
2Q2FWREHU*(FRPPHQFHGDQRIIHUWRH[FKDQJH*(FRPPRQVWRFNIRUFRPPRQVWRFNRI*(&DSLWDO¶VDSSUR[LPDWHO\
owned subsidiary, Synchrony Financial. On November 17, 2015, we completed the split-off of Synchrony Financial, through which the
Company accepted 671,366,809 shares of GE common stock from its shareholders in exchange for 705,270,833 shares of Synchrony
Financial common stock that it owned and recorded an after-tax gain of $3,429 million within discontinued operations. In connection
with the public offering and sale of Synchrony Financial, GE Capital indemnified Synchrony Financial and its directors, officers, and
HPSOR\HHVDJDLQVWWKHOLDELOLWLHVRI*(&&¶VEXVLQHVVHVRther than historical liabilities of the businesses that are part of Synchrony
)LQDQFLDO¶V ongoing operations. With the completion of the split-off and the )HGHUDO5HVHUYH%RDUG¶V)5%VXEVHTXHQWapproval of GE
&DSLWDO¶V application to deregister as a savings and loan holding company, GE Capital is no longer a savings and loan holding
company.
ACCOUNTING PRINCIPLES AND POLICIES
Our financial statements are prepared in conformity with GAAP.
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.
Except for goods sold under long-term agreements, we recognize sales of goods under the provisions of U.S. Securities and Exchange
Commission (SEC) Staff Accounting Bulletin (SAB) 104, Revenue Recognition. We often sell consumer products and computer
hardware and software products with a right of return. We use our accumulated experience to estimate and provide for such returns
when we record the sale. In situations where arrangements include customer acceptance provisions based on seller or customer-
specified objective criteria, we recognize revenue when we have reliably demonstrated that all specified acceptance criteria have been
met or when formal acceptance occurs, respectively. In arrangements where we provide goods for trial and evaluation purposes, we
only recognize revenue after customer acceptance occurs. Unless otherwise noted, we do not provide for anticipated losses before we
record sales.
GE 2015 FORM 10-K 139