14.
|
Recent Accounting Standard Updates
|
We consider the applicability and impact of all ASUs on our consolidated financial statements. Updates not listed below were assessed and
determined to be either not applicable or are expected to have minimal impact on our consolidated financial position or results of operations. Recently issued ASUs which we feel may be applicable to us are as follows:
Recently Issued Accounting Standard Updates Not Yet Adopted
IntangiblesGoodwill and OtherInternal-Use Software
In August 2018, the FASB issued ASU 2018-15,
IntangiblesGoodwill and OtherInternal-Use Software (Subtopic
350-40): Customers Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.
ASU 2018-15 aligns the requirements 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 (and hosting arrangements that include an internal use software license). The accounting for the service
element of a hosting arrangement that is a service contract is not affected by these amendments. ASU 2018-15 is effective for us in the first quarter of fiscal 2020, and earlier adoption is permitted. We are currently evaluating the
impact the adoption of ASU 2018-15 will have on our consolidated financial statements.
Fair Value Measurement
In August 2018, the FASB issued ASU 2018-13,
Fair Value Measurement (Topic 820): Disclosure FrameworkChanges to
the Disclosure Requirements for Fair Value Measurement.
ASU
2018-13
modifies the disclosure requirements on fair value measurements. ASU 2018-13 is effective for us in the first
quarter of fiscal 2020, and earlier adoption is permitted. We are currently evaluating what impact the adoption of ASU 2018-13 will have on our consolidated financial statements.
Stock-based Compensation
In June 2018, the FASB issued ASU
2018-07,
Compensation Stock Compensation (Topic 718):
Improvements to Nonemployee Share-Based Payment Accounting.
ASU
2018-07
expands the scope of Topic 718 to include all share-based payment transactions for acquiring goods and services from
nonemployees. ASU
2018-07
is effective for us in the first quarter of fiscal 2020. Early adoption is permitted. We are currently evaluating what impact the adoption of this update will have on our consolidated
financial statements.
Comprehensive Income
In February 2018, the FASB issued ASU
2018-02,
Income Statement Reporting Comprehensive
Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.
On December 22, 2017, the U.S. federal government enacted a tax bill, H.R.1,
An Act to Provide for Reconciliation
Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018 (Tax Cuts and Jobs Act)
, which requires deferred tax liabilities and assets to be adjusted for the effect of a change in tax laws. ASU
2018-02
allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Reform Act. ASU
2018-02
is
effective for us in the first quarter of fiscal 2020. Early adoption is permitted. We are currently evaluating what impact the adoption of this update will have on our consolidated financial statements.
Leases
In February 2016,
the FASB issued ASU
2016-02,
Leases (Topic 842),
which supersedes ASC 840,
Leases (Topic 840).
Subsequently, the FASB issued additional updates which clarify this guidance
including ASU
2018-01,
Leases (Topic 842: Land Easement Practical Expedient for Transitioning to Topic 842,
in January 2018,
which allows an entity to elect an optional transition
practical expedient to not evaluate land easements that exist or expired before the entitys adoption of Topic 842, and ASU
2018-11,
Leases Targeted Improvements (Topic 842),
which provides for an additional transition method that allows companies to apply the new lease standard at the adoption date, eliminating the requirement to apply the standard to the earliest period presented in the consolidated financial
statements. ASU
2016-02
requires a lessee to recognize a
right-of-use
asset and a lease liability for operating leases with terms
over twelve months, initially measured at the present value of the lease payments, in its balance sheet. The standard also requires a lessee to recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term,
on a generally straight-line basis. It also requires lessees to classify leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. This
classification will determine whether the lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. Early adoption of the new guidance is permitted. ASU
2016-02,
ASU
2018-01
and ASU
2018-11
are effective for us beginning in the first quarter of fiscal 2020. We have begun evaluating
and planning for adoption and implementation, including gathering, documenting and analyzing lease agreements subject to the new guidance. We anticipate material additions to the balance sheet (upon adoption) of
right-of-use
assets, offset by the associated liabilities.
Recently Issued Accounting
Standard Updates Adopted During the Period
Revenue from Contracts with Customers (Topic 606)
In May 2014, the FASB issued ASU.
2014-09,
Revenue from Contracts with Customers (Topic
606).
ASU
2014-09
provides enhancements to the quality and consistency of how revenue is reported while also improving comparability in the financial statements of companies using
International Financial Reporting Standards and U.S. GAAP. The core principle requires entities to recognize revenue in a manner that depicts the transfer of goods or services to customers in amounts that reflect the consideration an entity expects
to be entitled to in exchange for those goods or services. In July 2015, the FASB voted to approve a
one-year
deferral, making the standard effective for public entities for annual and interim periods
beginning after December 15, 2017.
In March 2016, the FASB issued ASU
2016-08,
Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)
. The purpose of ASU
2016-08
is to clarify the guidance on principal versus agent considerations. It includes indicators that help to determine whether an entity controls the specified good or service before it is transferred to
the customer and to assist in determining when the entity satisfied the performance obligation and as such, whether to recognize a gross or a net amount of consideration in their consolidated statement of operations.
24