Accounting Principles and Practices (Policies) |
6 Months Ended |
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Jun. 30, 2026 | |
| Accounting Policies [Abstract] | |
| Basis of Presentation | Basis of Presentation The accompanying Condensed Consolidated Financial Statements and Notes thereto have been prepared in accordance with U.S. GAAP. The Condensed Consolidated Financial Statements include the accounts of Aon plc and all of its controlled subsidiaries (“Aon” or the “Company”). Intercompany accounts and transactions have been eliminated. The Condensed Consolidated Financial Statements include, in the opinion of management, all adjustments (consisting of normal recurring adjustments and reclassifications) necessary to present fairly the Company’s consolidated financial position, results of operations, and cash flows for all periods presented. Certain information and disclosures normally included in the Consolidated Financial Statements prepared in accordance with U.S. GAAP have been condensed or omitted. The Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. The results for the three and six months ended June 30, 2026 are not necessarily indicative of operating results that may be expected for the full year ending December 31, 2026.
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| Consolidation | The accompanying Condensed Consolidated Financial Statements and Notes thereto have been prepared in accordance with U.S. GAAP. The Condensed Consolidated Financial Statements include the accounts of Aon plc and all of its controlled subsidiaries (“Aon” or the “Company”). Intercompany accounts and transactions have been eliminated. The Condensed Consolidated Financial Statements include, in the opinion of management, all adjustments (consisting of normal recurring adjustments and reclassifications) necessary to present fairly the Company’s consolidated financial position, results of operations, and cash flows for all periods presented. Certain information and disclosures normally included in the Consolidated Financial Statements prepared in accordance with U.S. GAAP have been condensed or omitted. The Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. The results for the three and six months ended June 30, 2026 are not necessarily indicative of operating results that may be expected for the full year ending December 31, 2026.
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| Use of Estimates | Use of Estimates The preparation of the accompanying Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements, and the reported amounts of reserves and expenses. These estimates and assumptions are based on management’s best estimates and judgments. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. Management believes its estimates to be reasonable given the current facts available. Aon adjusts such estimates and assumptions when facts and circumstances dictate. Illiquid credit markets, volatile equity markets, and foreign currency exchange rate movements increase the uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in estimates resulting from continuing changes in the economic environment would, if applicable, be reflected in the Condensed Consolidated Financial Statements in future periods.
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| New Accounting Pronouncements | New Accounting Pronouncements Accounting Standards Issued But Not Yet Adopted Accounting for and Disclosure of Environmental Credits and Environmental Credit Obligations In May 2026, the FASB issued new accounting guidance under ASC 818, Environmental Credits and Environmental Credit Obligations, which provides guidance on the recognition, measurement, presentation, and disclosure of environmental credits and environmental credit obligations. The guidance is applicable to environmental credits acquired, generated, or received by an entity and requires expanded disclosures related to the nature, intended use, and financial statement impacts. The new guidance is effective for annual and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the timing of adoption and the impact the guidance will have on the Consolidated Financial Statements and Notes. Accounting for and Disclosure of Software Costs In September 2025, the FASB issued new accounting guidance under ASC 350-40, Intangibles — Goodwill and Other Internal Use Software to modernize the criteria for capitalizing software development costs by removing references to development stages and framework updates to better reflect current software development practices. The new guidance is effective for annual periods beginning after December 15, 2027, with early adoption permitted. The Company is evaluating the impact the new guidance will have on the Consolidated Financial Statements and Notes. Disaggregation of Income Statement Expenses In November 2024, the FASB issued new accounting guidance under ASC 220, Income Statement — Reporting Comprehensive Income, which requires more detailed information about certain expenses in commonly presented expense captions including inventory, employee compensation, depreciation, and amortization. The new guidance also requires disclosure of total selling expenses and, on an annual basis, an entity’s definition of selling expenses. The new guidance is effective for Aon for the year ended December 31, 2027, with early adoption permitted. Entities may apply the new guidance on a prospective basis, with the option for retrospective application. The Company is currently evaluating the transition approach and the impact the guidance will have on the Notes to Consolidated Financial Statements. Securities and Exchange Commission Final Rules The Enhancement and Standardization of Climate-Related Disclosures for Investors In March 2024, the SEC adopted final rules to enhance and standardize climate-related disclosures. The final rules would require the Company to provide certain climate-related information in Item 7, Management’s Discussion and Analysis and the Notes to Consolidated Financial Statements, including regarding material climate-related risks, activities to mitigate or adapt to such risks, information regarding oversight and management of climate-related risks, information on climate-related targets or goals, and disclosure of Scope 1 and 2 GHG emissions. The final rules have been subject to several legal challenges, and the SEC stayed the effectiveness of the final rules in April 2024 pending judicial review. On March 27, 2025, the SEC voted to end its legal defense of the final rules in Court of Appeals for the Eighth Circuit. On September 12, 2025, the Eighth Circuit issued an order holding the consolidated petitions for review in abeyance until the SEC informed the court whether it would reconsider the rules under administrative procedures or whether the SEC would renew its defense of the rules. On May 29, 2026, the SEC proposed to rescind the climate-related disclosure rules in their entirety due to the lack of statutory authority of the SEC. The proposal remains subject to public comment. The Company will continue to monitor developments related to the proposed rescission and any impacts on its disclosure requirements.
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| Derivatives and Hedging | The Company is exposed to market risks, including changes in foreign currency exchange rates and interest rates. To manage the risk related to these exposures, the Company enters into various derivative instruments that reduce these risks by creating offsetting exposures. The Company does not enter into derivative transactions for trading or speculative purposes. Foreign Exchange Risk Management The Company is exposed to foreign exchange risk when it earns revenues, pays expenses, enters into monetary intercompany transfers or other transactions denominated in a currency that differs from its functional currency. The Company uses foreign exchange derivatives, typically forward contracts and options, to reduce its overall exposure to the effects of currency fluctuations on cash flows. These exposures are hedged, on average, for less than two years. These derivatives are accounted for as hedges, and changes in fair value are recorded each period in Other comprehensive income (loss) in the Condensed Consolidated Statements of Comprehensive Income. In April 2026, the Company entered into three cross-currency interest rate swap transactions with an aggregate notional amount of $1.0 billion, including two $300 million swaps with 7-year and 10-year maturities and one $400 million swap with a 5-year maturity. The Company uses cross-currency interest rate swaps to hedge a designated portion of its net investments in certain euro-denominated foreign subsidiaries against foreign exchange risk and accounts for these instruments as net investment hedges. For a net investment hedge, the change in fair value of the hedging instrument due to changes in foreign currency exchange rates is recorded in Foreign currency translation adjustments, a component of Accumulated Other Comprehensive Income, to the extent it is effective as a hedge. The Company has elected to assess hedge effectiveness through the use of the spot method based on changes in fair value attributable only to changes in spot exchange rates. The cross-currency basis spread is excluded from the hedge effectiveness assessment. The Company assessed the hedges relationships and determined that they continued to qualify for hedge accounting as of June 30, 2026. The interest rate spread component is recognized using a systematic and rational method over the life of the hedging instruments in Interest expenses. The bi-annual interest settlements recognized are classified as operating activities in the Condensed Consolidated Statements of Cash Flows. Cash flows associated with the exchange of notional principal at the maturity of the swaps will be classified as investing activities in the Condensed Consolidated Statements of Cash Flows. If the net investments are sold or substantially liquidated, the balance of the Foreign currency translation adjustments accumulated in Other comprehensive income (loss) is recognized within Net income. The Company also uses foreign exchange derivatives, typically forward contracts and options, to economically hedge the currency exposure of the Company’s global liquidity profile, including monetary assets or liabilities that are denominated in a non-functional currency of an entity, typically on a rolling 90-day basis, but may be for up to one year in the future. These derivatives are not accounted for as hedges, and changes in fair value are recorded each period in Other income (expense) in the Condensed Consolidated Statements of Income.
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| Fair Value Measurements and Financial Instruments | Accounting standards establish a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair values as follows: •Level 1 — observable inputs such as quoted prices for identical assets in active markets; •Level 2 — inputs other than quoted prices for identical assets in active markets, that are observable either directly or indirectly; and •Level 3 — unobservable inputs in which there is little or no market data which requires the use of valuation techniques and the development of assumptions. The following methods and assumptions are used to estimate the fair values of the Company’s financial instruments: Money market funds consist of institutional prime, treasury, and government money market funds. The Company reviews treasury and government money market funds to obtain reasonable assurance that the fund net asset value is $1 per share, and reviews the floating net asset value of institutional prime money market funds for reasonableness. Equity investments consist of equity securities and equity derivatives valued using the closing stock price on a national securities exchange. Over-the-counter equity derivatives are valued using observable inputs such as underlying prices of the underlying security and volatility. On a sample basis, the Company reviews the listing of Level 1 equity securities in the portfolio, agrees the closing stock prices to a national securities exchange, and independently verifies the observable inputs for Level 2 equity derivatives and securities. Fixed income investments consist of certain categories of bonds and derivatives. Corporate, government, and agency bonds are valued by pricing vendors who estimate fair value using recently executed transactions and proprietary models based on observable inputs, such as interest rate spreads, yield curves, and credit risk. Asset-backed securities are valued by pricing vendors who estimate fair value using DCF models utilizing observable inputs based on trade and quote activity of securities with similar features. Fixed income derivatives are valued by pricing vendors using observable inputs such as interest rates and yield curves. The Company obtains an understanding of the models, inputs, and assumptions used in developing prices provided by its vendors through discussions with the fund managers. The Company independently verifies the observable inputs, as well as assesses assumptions used for reasonableness based on relevant market conditions and internal Company guidelines. If an assumption is deemed unreasonable, based on internal Company guidelines, it is then reviewed by management and the fair value estimate provided by the vendor is adjusted, if deemed appropriate. These adjustments do not occur frequently and historically are not material to the fair value estimates used in the Condensed Consolidated Financial Statements. Derivatives are carried at fair value, based upon industry standard valuation techniques that use, where possible, current market-based or independently sourced pricing inputs, such as interest rates, currency exchange rates, or implied volatility. Debt is carried at outstanding principal balance, less any unamortized issuance costs, discount or premium. Fair value is based on quoted market prices or estimates using DCF analyses based on current borrowing rates for similar types of borrowing arrangements.
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