3. Recent Accounting Pronouncements

In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-05,

Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement

, providing criteria for determining if a license of software, as part of a cloud services arrangement, is subject to capitalization under the existing guidance for internal-use software. The guidance is effective for the Company’s fiscal 2017.

In July 2015, the FASB issued ASU 2015-11,

Inventory

, which modifies the subsequent measurement of inventories recorded under a first-in-first-out or average cost method. Under the new standard, such inventories are required to be measured at the lower of cost and net realizable value. The new standard is effective for the Company’s fiscal 2018, with prospective application.

In August 2015, the FASB issued ASU 2015-15,

Interest - Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements - Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting

, which provides clarification from ASU No. 2015-03 regarding the presentation and subsequent measurement of debt issuance costs associated with line-of-credit arrangements.

In February 2016, the FASB issued ASU 2016-02,

Leases (Topic 842)

. The ASU is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. ASU 2016-02 requires, among other changes to the lease accounting guidance, lessees to recognize most leases on-balance sheet via a right of use asset and lease liability, and additional qualitative and quantitative disclosures. The ASU is effective for the Company’s fiscal 2020 with a modified retrospective transition method, and early adoption is permitted.

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 ASU is intended to clarify implementation guidance on principal versus agent considerations while reducing the potential for diversity in practice arising from inconsistent application. The effective date and transition requirements for ASU 2016-08 are the same as the effective date and transition requirements of ASU 2014-09 and 2015-14. The guidance is effective for the Company’s fiscal 2019.

In March 2016, the FASB issued ASU 2016-09,

Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting

. The ASU includes multiple provisions intended to simplify various aspects of the accounting for share-based payments, while reducing cost and complexity. The ASU is effective for the Company’s fiscal 2018, and early adoption is permitted.

In April 2016, the FASB issued ASU 2016-10,

Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing

. The ASU is intended to clarify implementation guidance on performance obligations and licensing while reducing the potential for diversity in practice arising from inconsistent application. The effective date and transition requirements for ASU 2016-10 are the same as the effective date and transition requirements of ASU 2014-09 and 2015-14. The guidance is effective for the Company’s fiscal 2019.

The Company is evaluating the effect the new guidance will have on its consolidated financial statements and related disclosures.

In July 2013, the FASB issued ASU 2013-11,

Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists

. The guidance requires an entity to present its deferred tax asset for a net operating loss carryforward, similar tax loss, or a tax credit carryforward net of unrecognized tax benefits when settlement in this manner is available under the tax law, which would be based on facts and circumstances as of the balance sheet reporting date and would not consider future events. The Company adopted the guidance in fiscal year 2015 and there is no significant impact on the Company’s financial statements.

In April 2015, the FASB issued ASU 2015-03,

Interest—Imputation of Interest

, which 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. The recognition and measurement guidance of debt issuance costs are not affected by the amendments in this update. The new standard is effective for the Company’s fiscal year 2017 and requires the Company to apply the new guidance on a retrospective basis upon adoption. Upon adoption, the Company expects $1,421 and $1,611 of debt issuance costs recorded within other non-current assets at June 26, 2016 and June 28, 2015, respectively, would be presented in the consolidated balance sheets as a direct deduction from the carrying amount of the corresponding debt liabilities.

In fiscal 2016, the Company early adopted ASU 2015-17,

Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes

. The ASU eliminates the existing requirement for entities to present deferred tax assets and liabilities as current and noncurrent in a classified balance sheet. Instead, upon adoption, entities are required to classify all deferred tax assets and liabilities as noncurrent. Adopting this ASU provides simplification in the presentation of deferred tax assets and liabilities and alignment with International Financial Reporting Standards.

Retrospective application of June 28, 2015 balances reflect the revised presentation requirements of ASU 2015-17, as outlined in the table below.

	June 28, 2015 As Previously Reported		Adjustments Due to Adoption of ASU 2015-17			June 28, 2015 As Adjusted
Deferred income taxes (within total current assets)	$	2,383	$	(2,383	)	$	—
Total current assets		215,347		(2,383	)		212,964

Deferred income taxes (within non-current assets)		1,539		2,383			3,922
Total assets		476,372		—			476,372

Deferred income taxes (within non-current liabilities)		90		—			90
Total liabilities		177,279		—			177,279

There have been no other newly issued or newly applicable accounting pronouncements that have, or are expected to have, a significant impact on the Company's financial statements.