LabCorp 2013 Annual Report Download - page 19

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15
LABORATORY CORPORATION OF AMERICA
Management’s Discussion and Analysis
of Financial Condition and Results of Operations (in millions)
The contractual value of the remaining noncontrolling interest
put totals $19.4 at December 31, 2013. At December 31, 2013
and 2012, $19.4 and $20.7, respectively, have been classified as
mezzanine equity in the Company’s consolidated balance sheet.
Based on current and projected levels of operations, coupled
with availability under its Revolving Credit Facility, the Company
believes it has sufficient liquidity to meet both its anticipated short-
term and long-term cash needs; however, the Company continually
reassesses its liquidity position in light of market conditions and
other relevant factors.
New Accounting Pronouncements
In March 2013, the FASB issued a new accounting standard on
foreign currency matters that clarifies the guidance of a parent
company’s accounting for the cumulative translation adjustment
upon derecognition of certain subsidiaries or groups of assets
within a foreign entity or of an investment in a foreign entity.
Under this new standard, a parent company that ceases to have
a controlling financial interest in a foreign subsidiary or group of
assets within a foreign entity shall release any related cumulative
translation adjustment into net income only if a sale or transfer
results in complete or substantially complete liquidation of the
foreign entity. This standard shall be applied prospectively and
will become effective for the Company on January 1, 2014. The
Company expects that the adoption of this standard will not have
a material effect on its consolidated financial statements.
Critical Accounting Policies
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts
of revenues and expenses during the reported periods. While the
Company believes these estimates are reasonable and consistent,
they are by their very nature, estimates of amounts that will depend
on future events. Accordingly, actual results could differ from these
estimates. The Company’s Audit Committee periodically reviews
the Company’s significant accounting policies. The Company’s
critical accounting policies arise in conjunction with the following:
• Revenue recognition and allowance for doubtful accounts;
• Pension expense;
• Accruals for self insurance reserves;
• Income taxes; and
• Goodwill and indefinite-lived assets