| Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Principles of Consolidation and Basis of Preparation The consolidated financial statements include the accounts of Mattel, Inc. and its subsidiaries. All wholly and majority-owned subsidiaries are consolidated and included in Mattel’s consolidated financial statements. Mattel does not have any minority stock ownership interests in which it has a controlling financial interest that would require consolidation. All significant intercompany accounts and transactions have been eliminated upon consolidation. On January 1, 2018, Mattel adopted ASU 2017-07, Compensation - Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. As a result, other selling and administrative expenses, operating income (loss), and other non-operating expense, net have been retrospectively restated. The impact to Mattel’s consolidated financial statements was not material. See further discussion in "Note 1 to the Consolidated Financial Statements—Summary of Significant Accounting Policies—New Accounting Pronouncements" and "Note 4 to the Consolidated Financial Statements—Employee Benefit Plans." Restatement of Quarterly Financial Information On August 6, 2019, Mattel was made aware of an anonymous whistleblower letter. An independent investigation by the Audit Committee was initiated in August 2019 on matters discussed in the letter. Based on the independent investigation, management determined that it had failed to properly consider an indefinite-lived intangible asset in Mattel’s tax valuation allowance calculation for the three months ended September 30, 2017, which resulted in the restatement of the Company’s financial results for the third and fourth quarters of 2017, as further described in "Note 17 to the Consolidated Financial Statements—Restatement of Quarterly Financial Information (Unaudited)". Revision of Consolidated Financial Statements Mattel’s consolidated financial statements have been revised to correct certain other prior period misstatements which were not material, both individually or in the aggregate, to the previously issued consolidated financial statements. These misstatements relate to improper capitalization of certain advertising costs, the under-accrual of sales adjustments, freight and logistics costs, employee related costs, the provision for income taxes, and other information disclosed in the notes to the Consolidated Financial Statements. The provision for income taxes misstatement was unrelated to the restated income tax matter described in "Note 17 to the Consolidated Financial Statements—Restatement of Quarterly Financial Information (Unaudited)". The following tables present the impact of the revisions on Mattel’s previously issued Consolidated Statements of Operations (including Comprehensive (Loss) Income), and Cash Flows for the years ended December 31, 2018, 2017, and 2016, its Consolidated Balance Sheets as of December 31, 2018 and 2017, and its Consolidated Statements of Stockholders' Equity for the years ended December 31, 2018, 2017, and 2016. The presentation of the revised Consolidated Balance Sheets only presents those line items which were impacted as a result of the revisions. The effect of the revisions to the Consolidated Statements of Cash Flows was to components within operating cash flows. There were no effects on total operating activities, investing activities, financing activities, or cash and cash equivalents as a result of the revisions. All relevant footnotes to the consolidated financial statements have also been revised to reflect the items above. CONSOLIDATED BALANCE SHEETS December 31, 2018 As Previously Reported Adjustments As Revised (in thousands) Consolidated Balance Sheet Prepaid expenses and other current assets $ 244,987 $ (5,240 ) $ 239,747 Total current assets $ 2,352,440 $ (5,240 ) $ 2,347,200 Total Assets $ 5,243,465 $ (5,240 ) $ 5,238,225 Accrued liabilities $ 700,421 $ 3,948 $ 704,369 Income taxes payable $ 10,046 $ 3,474 $ 13,520 Total current liabilities $ 1,252,608 $ 7,422 $ 1,260,030 Retained earnings $ 1,629,257 $ (12,662 ) $ 1,616,595 Total stockholders’ equity $ 669,465 $ (12,662 ) $ 656,803 Total Liabilities and Stockholders’ Equity $ 5,243,465 $ (5,240 ) $ 5,238,225 December 31, 2017 As Previously Reported Adjustments As Revised (in thousands) Consolidated Balance Sheet Accounts receivable, net $ 1,128,610 $ (3,958 ) $ 1,124,652 Prepaid expenses and other current assets $ 303,053 $ (7,388 ) $ 295,665 Total current assets $ 3,111,588 $ (11,346 ) $ 3,100,242 Other noncurrent assets $ 944,961 $ 990 $ 945,951 Total Assets $ 6,238,503 $ (10,356 ) $ 6,228,147 Retained earnings $ 2,179,358 $ (10,356 ) $ 2,169,002 Total stockholders’ equity $ 1,257,455 $ (10,356 ) $ 1,247,099 Total Liabilities and Stockholders’ Equity $ 6,238,503 $ (10,356 ) $ 6,228,147 CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS Year Ended December 31, 2018 As Previously Reported Adjustments As Revised (In thousands, except per share amounts) Consolidated Statement of Operations and Comprehensive Loss Net Sales $ 4,510,852 $ 3,958 $ 4,514,810 Cost of sales 2,716,127 — 2,716,127 Gross Profit 1,794,725 3,958 1,798,683 Advertising and promotion expenses 526,436 (2,148 ) 524,288 Other selling and administrative expenses 1,504,796 3,948 1,508,744 Operating Loss (236,507 ) 2,158 (234,349 ) Interest expense 181,886 — 181,886 Interest (income) (6,463 ) — (6,463 ) Other non-operating expense, net 7,331 — 7,331 Loss Before Income Taxes (419,261 ) 2,158 (417,103 ) Provision for income taxes 111,732 4,464 116,196 Net Loss $ (530,993 ) $ (2,306 ) $ (533,299 ) Comprehensive Loss $ (608,433 ) $ (2,306 ) $ (610,739 ) Net Loss Per Common Share - Basic $ (1.54 ) $ (0.01 ) $ (1.55 ) Weighted average number of common shares 345,012 — 345,012 Net Loss Per Common Share - Diluted $ (1.54 ) $ (0.01 ) $ (1.55 ) Weighted average number of common and potential common shares 345,012 — 345,012 Year Ended December 31, 2017 As Previously Reported Adjustments As Revised (In thousands, except per share amounts) Consolidated Statement of Operations and Comprehensive Loss Net Sales $ 4,881,951 $ (458 ) $ 4,881,493 Cost of sales 3,061,122 (4,200 ) 3,056,922 Gross Profit 1,820,829 3,742 1,824,571 Advertising and promotion expenses 642,286 — 642,286 Other selling and administrative expenses 1,517,983 — 1,517,983 Operating Loss (339,440 ) 3,742 (335,698 ) Interest expense 105,214 — 105,214 Interest (income) (7,777 ) — (7,777 ) Other non-operating expense, net 68,110 — 68,110 Loss Before Income Taxes (504,987 ) 3,742 (501,245 ) Provision for income taxes 548,849 4,485 553,334 Net Loss $ (1,053,836 ) $ (743 ) $ (1,054,579 ) Comprehensive Loss $ (892,593 ) $ (743 ) $ (893,336 ) Net Loss Per Common Share - Basic $ (3.07 ) $ — $ (3.07 ) Weighted average number of common shares 343,564 — 343,564 Net Loss Per Common Share - Diluted $ (3.07 ) $ — $ (3.07 ) Weighted average number of common and potential common shares 343,564 — 343,564 Year Ended December 31, 2016 As Previously Reported Adjustments As Revised (In thousands, except per share amounts) Consolidated Statement of Operations and Comprehensive Income Net Sales $ 5,456,650 $ (3,500 ) $ 5,453,150 Cost of sales 2,902,259 4,200 2,906,459 Gross Profit 2,554,391 (7,700 ) 2,546,691 Advertising and promotion expenses 634,947 — 634,947 Other selling and administrative expenses 1,391,769 — 1,391,769 Operating Income 527,675 (7,700 ) 519,975 Interest expense 95,118 — 95,118 Interest (income) (9,144 ) — (9,144 ) Other non-operating expense, net 31,959 — 31,959 Income Before Income Taxes 409,742 (7,700 ) 402,042 Provision for income taxes 91,720 (2,586 ) 89,134 Net Income $ 318,022 $ (5,114 ) $ 312,908 Comprehensive Income $ 223,892 $ (5,114 ) $ 218,778 Net Income Per Common Share - Basic $ 0.93 $ (0.02 ) $ 0.91 Weighted average number of common shares 341,480 — 341,480 Net Income Per Common Share - Diluted $ 0.92 $ (0.01 ) $ 0.91 Weighted average number of common and potential common shares 344,233 — 344,233 CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended December 31, 2018 As Previously Reported Adjustments As Revised (In thousands) Consolidated Statement of Cash Flows Net loss $ (530,993 ) $ (2,306 ) $ (533,299 ) Adjustments to reconcile net loss to net cash flows used for operating activities: Depreciation 232,837 — 232,837 Amortization 39,095 — 39,095 Share-based compensation 48,915 — 48,915 Bad debt expense 40,894 — 40,894 Inventory obsolescence 74,974 — 74,974 Asset impairments 18,203 — 18,203 Deferred income taxes 12,359 990 13,349 Indefinite reinvestment assertion and U.S. Tax Act 18,275 — 18,275 Increase (decrease) from changes in assets and liabilities: Accounts receivable 76,373 (3,958 ) 72,415 Inventories (53,840 ) — (53,840 ) Prepaid expenses and other current assets 56,378 (2,148 ) 54,230 Accounts payable, accrued liabilities, and income taxes payable (54,819 ) 7,422 (47,397 ) Other, net (5,968 ) — (5,968 ) Net cash flows used for operating activities $ (27,317 ) $ — $ (27,317 ) Year Ended December 31, 2017 As Previously Reported Adjustments As Revised (in thousands) Consolidated Statement of Cash Flows Net loss $ (1,053,836 ) $ (743 ) $ (1,054,579 ) Adjustments to reconcile net loss to net cash flows used for operating activities: Depreciation 240,818 — 240,818 Amortization 33,949 — 33,949 Share-based compensation 67,119 — 67,119 Bad debt expense 17,568 — 17,568 Inventory obsolescence 127,592 — 127,592 Asset impairments 56,324 — 56,324 Deferred income taxes (19,840 ) 1,830 (18,010 ) Indefinite reinvestment assertion and U.S. Tax Act (105,279 ) (1,770 ) (107,049 ) Valuation allowance on deferred tax assets 561,921 4,425 566,346 Loss on discontinuation of Venezuelan operations 58,973 — 58,973 Increase (decrease) from changes in assets and liabilities: Accounts receivable (3,942 ) 458 (3,484 ) Inventories (91,644 ) — (91,644 ) Prepaid expenses and other current assets 33,681 — 33,681 Accounts payable, accrued liabilities, and income taxes payable 98,044 (4,200 ) 93,844 Other, net (49,062 ) — (49,062 ) Net cash flows used for operating activities $ (27,614 ) $ — $ (27,614 ) Year Ended December 31, 2016 As Previously Reported Adjustments As Revised (in thousands) Consolidated Statement of Cash Flows Net income $ 318,022 $ (5,114 ) $ 312,908 Adjustments to reconcile net income to net cash flows provided by operating activities: Depreciation 235,797 — 235,797 Amortization 26,543 — 26,543 Share-based compensation 53,950 — 53,950 Bad debt expense 9,165 — 9,165 Inventory obsolescence 31,455 — 31,455 Deferred income taxes 1,236 (2,586 ) (1,350 ) Increase (decrease) from changes in assets and liabilities, net of acquired assets and liabilities: Accounts receivable (33,198 ) 3,500 (29,698 ) Inventories (68,650 ) — (68,650 ) Prepaid expenses and other current assets 34,754 — 34,754 Accounts payable, accrued liabilities, and income taxes payable 9,006 4,200 13,206 Other, net (23,571 ) — (23,571 ) Net cash flows provided by operating activities $ 594,509 $ — $ 594,509 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY December 31, 2018 As Previously Reported Adjustments As Revised (in thousands) Retained earnings $ 1,629,257 $ (12,662 ) $ 1,616,595 Total stockholders’ equity $ 669,465 $ (12,662 ) $ 656,803 December 31, 2017 As Previously Reported Adjustments As Revised (in thousands) Retained earnings $ 2,179,358 $ (10,356 ) $ 2,169,002 Total stockholders’ equity $ 1,257,455 $ (10,356 ) $ 1,247,099 December 31, 2016 As Previously Reported Adjustments As Revised (in thousands) Retained earnings at beginning of period (a) $ 3,745,815 $ (4,499 ) $ 3,741,316 Total stockholders’ equity at beginning of period (a) $ 2,633,254 $ (4,499 ) $ 2,628,755 Retained earnings at end of period $ 3,545,359 $ (9,613 ) $ 3,535,746 Total stockholders’ equity at end of period $ 2,407,782 $ (9,613 ) $ 2,398,169 (a) Adjustments represent the cumulative effect of immaterial revisions originating in periods prior to 2016. Use of Estimates Preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could ultimately differ from those estimates. Cash and Equivalents Cash and equivalents include short-term investments, which are highly liquid investments with maturities of three months or less when purchased. Such investments are stated at cost, which approximates market value. Accounts Receivable and Allowance for Doubtful Accounts Credit is granted to customers on an unsecured basis. Credit limits and payment terms are established based on extensive evaluations made on an ongoing basis throughout the fiscal year of the financial performance, cash generation, financing availability, and liquidity status of each customer. Customers are reviewed at least annually, with more frequent reviews performed as necessary, based on the customers’ financial condition and the level of credit being extended. For customers who are experiencing financial difficulties, management performs additional financial analyses before shipping to those customers on credit. Mattel uses a variety of financial arrangements to ensure collectibility of accounts receivable of customers deemed to be a credit risk, including requiring letters of credit, purchasing various forms of credit insurance with unrelated third parties, factoring, or requiring cash in advance of shipment. Mattel records an allowance for doubtful accounts based on management’s assessment of the business environment, customers’ financial condition, historical collection experience, accounts receivable aging, and customer disputes. Inventories Inventories, net of allowance for obsolescence, are stated at the lower of cost or net realizable value. Expense associated with the allowance for obsolescence is recognized in cost of sales and establishes a lower cost basis for the inventory. Cost is determined by the first-in, first-out method. Property, Plant, and Equipment Property, plant, and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over estimated useful lives of 10 to 30 years for buildings, 3 to 15 years for machinery and equipment, 3 to 10 years for software, and 10 to 20 years, not to exceed the lease term, for leasehold improvements. Tools, dies, and molds are depreciated using the straight-line method over 3 years. Estimated useful lives are periodically reviewed and, where appropriate, changes are made prospectively. The carrying value of property, plant, and equipment is reviewed when events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Any potential impairment identified is assessed by evaluating the operating performance and future undiscounted cash flows of the underlying assets. When property is sold or retired, the cost of the property and the related accumulated depreciation are removed from the consolidated balance sheet, and any resulting gain or loss is included in the statements of operations. Goodwill and Intangible Assets Goodwill is allocated to various reporting units, which are at the operating segment level, for the purpose of evaluating whether goodwill is impaired. Mattel’s reporting units are: (i) North America, (ii) International, and (iii) American Girl. Components of the operating segments have been aggregated into a single reporting unit as the components have similar economic characteristics. The similar economic characteristics include the nature of the products, the nature of the production processes, the customers, and the manner in which the products are distributed. Mattel tests its goodwill for impairment annually in the third quarter and whenever events or changes in circumstances indicate that the carrying value of a reporting unit may exceed its fair value. Mattel had no nonamortizable intangible assets as of and for the year ended December 31, 2018. Prior to 2018, Mattel tested nonamortizable intangible assets for impairment annually in the third quarter or whenever events or changes in circumstances indicated that the carrying value may have exceeded its fair value. Mattel also tests its amortizable intangible assets, which are primarily comprised of trademarks and trade names, for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recovered. Amortization is computed primarily using the straight-line method over the estimated useful lives of the amortizable intangible assets. Foreign Currency Translation Exposure Mattel’s reporting currency is the U.S. dollar. The translation of its net investments in subsidiaries with non-U.S. dollar functional currencies subjects Mattel to the impact of currency exchange rate fluctuations in its results of operations and financial position. Assets and liabilities of subsidiaries with non-U.S. dollar functional currencies are translated into U.S. dollars at year-end exchange rates. Net income (loss) and cash flow items are translated at weighted-average exchange rates prevailing during the year. The resulting currency translation adjustments are recorded as a component of accumulated other comprehensive loss within stockholders’ equity. Mattel’s primary currency translation exposures in 2018 were related to its net investments in entities having functional currencies denominated in the Euro, British pound sterling, Russian ruble, and Brazilian real. Foreign Currency Transaction Exposure Currency exchange rate fluctuations may impact Mattel’s results of operations and cash flows. Mattel’s currency transaction exposures include gains and losses realized on unhedged inventory purchases and unhedged receivables and payables balances that are denominated in a currency other than the applicable functional currency. Gains and losses on unhedged inventory purchases and other transactions associated with operating activities are recorded in the components of operating (loss) income in the consolidated statements of operations. Gains and losses on unhedged intercompany loans and advances are recorded as a component of other non-operating expense , net in the consolidated statements of operations in the period in which the currency exchange rate changes. Inventory transactions denominated in the Euro, Mexican peso, British pound sterling, Canadian dollar, Chinese renminbi, Australian dollar, Russian ruble, and Brazilian real were the primary transactions that caused foreign currency transaction exposure for Mattel in 2018 . Derivative Instruments Mattel uses foreign currency forward exchange contracts as cash flow hedges primarily to hedge its purchases and sales of inventory denominated in foreign currencies. At the inception of the contracts, Mattel designates these derivatives as cash flow hedges and documents the relationship of the hedge to the underlying transaction. Hedge effectiveness is assessed at inception and throughout the life of the hedge to ensure the hedge qualifies for hedge accounting. Changes in fair value associated with hedge ineffectiveness, if any, are recorded in the statements of operations. Changes in fair value of cash flow hedge derivatives are deferred and recorded as part of accumulated other comprehensive loss in stockholders’ equity until the underlying transaction affects earnings. In the event that an anticipated transaction is no longer likely to occur, Mattel recognizes the change in fair value of the derivative in its statements of operations in the period the determination is made. Additionally, Mattel uses foreign currency forward exchange contracts to hedge intercompany loans and advances denominated in foreign currencies. Due to the short-term nature of the contracts involved, Mattel does not use hedge accounting for these contracts, and as such, changes in fair value are recorded in the period of change in the consolidated statements of operations. Revenue Recognition and Sales Adjustments Revenue is recognized when control of the goods is transferred to the customer, which is either upon shipment or upon receipt of finished goods by the customer, depending on the contract terms. Mattel routinely enters into arrangements with its customers to provide sales incentives, support customer promotions, and provide allowances for returns or defective merchandise. Such programs, which can be either contractual or discretionary in nature, are based primarily on customer purchases, customer performance of specified promotional activities, and other specified factors such as customer sales volume. Mattel bases its estimates for these programs on agreed upon customer contract terms as well as historical experience. The costs of these programs are considered variable consideration and are recorded as sales adjustments that reduce gross sales in the period the related sale is recognized. Advertising and Promotion Costs Costs of media advertising are expensed the first time the advertising takes place, except for direct-response advertising, which is capitalized and amortized over its expected period of future benefits. Direct-response advertising consists primarily of catalog production and mailing costs, which are generally amortized within three months from the date the catalogs are mailed. Product Recalls and Withdrawals Mattel establishes a reserve for product recalls and withdrawals on a product-specific basis when circumstances giving rise to the recall or withdrawal become known. Facts and circumstances related to the recall or withdrawal, including where the product affected by the recall or withdrawal is located (e.g., with consumers, in customers’ inventory, or in Mattel’s inventory), cost estimates for shipping and handling for returns, cost estimates for communicating the recall or withdrawal to consumers and customers, and cost estimates for parts and labor if the recalled or withdrawn product is deemed to be repairable, are considered when establishing a product recall or withdrawal reserve. These factors are updated and reevaluated each period, and the related reserves are adjusted when these factors indicate that the recall or withdrawal reserve is either not sufficient to cover or exceeds the estimated product recall or withdrawal expenses. Design and Development Costs Product design and development costs primarily include employee compensation and outside services and are charged to the results of operations as incurred. Employee Benefit Plans Mattel and certain of its subsidiaries have retirement and other postretirement benefit plans covering substantially all employees of these entities. Actuarial valuations are used in determining amounts recognized in the financial statements for certain retirement and other postretirement benefit plans (see "Note 4 to the Consolidated Financial Statements—Employee Benefit Plans"). Share-Based Payments Mattel recognizes the cost of employee share-based payment awards on a straight-line attribution basis over the requisite employee service period, net of estimated forfeitures. Determining the fair value of share-based awards at the measurement date requires judgment, including estimating the expected term that stock options will be outstanding prior to exercise, the associated volatility, and the expected dividends. With the exception of certain performance options granted in 2018, which are valued using a Monte Carlo valuation methodology, Mattel estimates the fair value of options granted using the Black-Scholes valuation model. The expected life of the options used in this calculation is the period of time the options are expected to be outstanding and has been determined based on historical exercise experience. Expected stock price volatility is based on the historical volatility of Mattel’s stock for a period approximating the expected life, the expected dividend yield is based on Mattel’s most recent actual annual dividend payout, and the risk-free interest rate is based on the implied yield available on U.S. Treasury zero-coupon issues approximating the expected life. Judgment is also required in estimating the amount of share-based awards that will be forfeited prior to vesting. Mattel determines the fair value of RSUs, excluding performance RSUs, based on the closing market price of Mattel’s common stock on the date of grant, adjusted by the present value of the expected dividends for RSUs that are not entitled to a dividend during the vest period. Mattel determines the fair value of the performance-related components of its performance RSUs based on the closing market price of Mattel's common stock on the date of grant. It determines the fair value of the market-related components of its performance RSUs based on a Monte Carlo valuation methodology. In 2016, Mattel early adopted Accounting Standards Update ("ASU") 2016-09, Improvements to Employee Share-Based Payment Accounting , which required companies to recognize all excess tax benefits and tax deficiencies in the income statement when the awards vest or are settled. Upon adoption in the fourth quarter of 2016, Mattel recognized $4.3 million in discrete tax benefits related to share-based payment accounting. Mattel also elected to apply the change in presentation of excess tax benefits in the statements of cash flows on a prospective basis, and as a result, prior periods were not retrospectively restated. Excess tax benefits (deficits) in 2018, 2017, and 2016 were classified as an operating activity in the statements of cash flows. Income Taxes Certain income and expense items are accounted for differently for financial reporting and income tax purposes. Deferred income tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities, applying enacted statutory income tax rates in effect for the year in which the differences are expected to reverse. In the normal course of business, Mattel is regularly audited by federal, state, local, and foreign tax authorities. The ultimate settlement of any particular issue with the applicable taxing authority could have a material impact on Mattel’s consolidated financial statements. Venezuelan Operations Since January 1, 2010, Mattel has accounted for Venezuela as a highly inflationary economy as the three-year cumulative inflation rate for Venezuela exceeded 100%. Accordingly, Mattel’s Venezuelan subsidiary used the U.S. dollar as its functional currency, and monetary assets and liabilities denominated in Venezuelan bolívar fuerte ("BsF") generated income or expense for changes in value associated with foreign currency exchange rate fluctuations against the U.S. dollar. During the first quarter of 2016, Mattel changed its remeasurement rate, which resulted in an unrealized foreign currency exchange loss of approximately $26 million , which was recognized in other non-operating expense, net in the consolidated statements of operations. During December 2017, Mattel initiated actions to discontinue operations in Venezuela and concluded that its Venezuelan subsidiary had been substantially liquidated. In connection with the substantial liquidation, Mattel recognized a $59.0 million loss in other non-operating expense, net in the consolidated statements of operations related to the associated cumulative translation adjustments. Argentina Operations Effective July 1, 2018, Mattel accounted for Argentina as a highly inflationary economy, as the projected three-year cumulative inflation rate exceeded 100%. As such, beginning July 1, 2018, Mattel's Argentina subsidiary has designated the U.S. dollar as its functional currency. For the year ended December 31, 2018 , Mattel’s Argentina subsidiary represented less than 1% of Mattel's consolidated net sales. New Accounting Pronouncements Recently Adopted Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) , which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition , and most industry specific guidance. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new guidance establishes a five-step model to achieve that core principle and also requires additional disclosures about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts. For additional information, see "Note 7 to the Consolidated Financial Statements—Revenues." In October 2016, the FASB issued ASU 2016-16, Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory, which requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. Mattel adopted ASU 2016-16 on January 1, 2018 and recognized a cumulative effect increase to the opening balance of its retained earnings of $9.4 million . For additional information, see "Note 15 to the Consolidated Financial Statements—Income Taxes." In March 2017, the FASB issued ASU 2017-07, Compensation - Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , which requires entities that sponsor defined benefit plans to (i) present service cost within operations, if such a subtotal is presented, (ii) other components of net benefit costs should be presented separately outside of income from operations, if such a subtotal is presented, and (iii) only the service cost component should be capitalized, when applicable. If a separate line item is not used, the line item in the income statement where the other components of net benefit costs are included must be disclosed. Further, gains and losses from curtailments and settlements, and the cost of certain termination benefits should be reported in the same manner as other components of net benefit cost. Mattel adopted ASU 2017-07 on January 1, 2018 and retrospectively restated its interim and annual results accordingly. The retrospective adoption of ASU 2017-07 did not have a material impact on Mattel’s consolidated financial statements, as discussed in "Note 4 to the Consolidated Financial Statements—Employee Benefit Plans." In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software: Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract , which aligns the requirement for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. Mattel early adopted ASU 2018-15 in the fourth quarter of 2018 and elected to apply the amendments prospectively to implementation costs incurred after the date of adoption. The adoption of ASU 2018-15 did not have a material impact on Mattel's consolidated financial statements. Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), as amended, which requires a lessee to recognize a lease asset and lease liability on its balance sheet for all leases with a term greater than 12 months. Mattel will adopt ASU 2016-02 and its related amendments on January 1, 2019 using the modified retrospective transition method, and record a cumulative effect adjustment in the first quarter of 2019. Prior periods will not be retrospectively adjusted and will continue to be reported under the accounting standards in effect for the periods. Mattel expects the adoption of ASU 2016-02 will have a material impact on its consolidated balance sheet. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities , which expands the hedging strategies eligible for hedge accounting and changes both how companies assess hedge effectiveness and presentation and disclosure requirements. Mattel will adopt ASU 2017-12 on January 1, 2019 and does not expect the adoption to have a material impact on its consolidated financial statements. In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income: |
