PHILADELPHIA ENERGY SOLUTIONS LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except unit and volume data)
Recent Accounting Developments
In February 2016, the
Financial Accounting Standard Board (FASB) issued new accounting guidance related to the presentation and disclosure of leasing arrangements. The new guidance requires that lessees recognize the assets and liabilities arising from all leases with
terms of more than 12 months on the balance sheet. The new guidance requires a modified retrospective adoption and is effective for fiscal years beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the
impact of this new guidance on its consolidated financial statements and related disclosures.
Presentation of Debt Issuance Costs
In April 2015, the FASB issued new accounting guidance related to the presentation of debt issuance costs in the balance sheet. The new
guidance requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts or premiums. The Company
currently presents such amounts as other long-term assets. The new guidance does not change the current recognition and measurement guidance for debt issuance costs. This guidance requires retrospective adoption and is effective for interim and
annual financial statements issued for fiscal years beginning after December 15, 2015. Early adoption of this guidance is permitted for financial statements that have not been previously issued. The Company adopted this guidance on January 1, 2016
with no impact to its results of operations, cash flows or net assets.
Amendments to the Consolidation Analysis
In February 2015, the FASB issued new guidance related to the evaluation of whether limited partnerships and similar legal entities are
variable interest entities (VIEs) or voting interest entities, eliminates the presumption that a general partner should consolidate a limited partnership and affects the consolidation analysis of reporting entities that are involved with VIEs,
particularly those that have fee arrangements and related party relationships. The requirements of the new guidance are effective for interim and annual periods beginning after December 15, 2015, and early adoption is permitted. The Company is
currently evaluating the impact of this new standard on its consolidated financial statements and related disclosures.
In May 2014, the FASB issued new guidance which establishes a comprehensive new revenue recognition model designed to depict the
transfer of goods or services to a customer in an amount that reflects the consideration the entity expects to be entitled to receive in exchange for those goods or services and requires significantly enhanced revenue disclosures. This guidance will
replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The standard is effective for interim and annual periods beginning after December 15, 2016. Early adoption is not permitted. In April 2015, the FASB issued
further guidance and delayed the effective date of the new standard by one year. Under the additional guidance, early adoption will be allowed, but not earlier than the original effective date. The Company is currently evaluating the impact of this
new guidance on its consolidated financial statements and related disclosures.