3.	NEW ACCOUNTING STANDARDS

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, “Revenue from Contracts with Customers.” The new standard requires an entity to recognize revenue at an amount that reflects the consideration to which the company expects to be entitled in exchange for transferring goods or services to a customer. The new revenue standard will be effective for the Company for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The methods of adoption provided for in the new standard are the retrospective method and the cumulative effect method. In 2016, the FASB issued final amendments clarifying the implementation guidance for principal versus agent considerations, identifying performance obligations, and the accounting of intellectual property licenses. Also, the FASB provided for practical expedients related to disclosures of remaining performance obligations, and guidance on collectability, non-cash consideration and the presentation of sales and similar taxes. The Company is currently assessing the impact that adoption of the new standard and the guidance will have on its consolidated financial statements and related note disclosures and has not yet selected a method of adoption.

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” The new standard requires lessees to recognize leases on the balance sheet as a right-of-use asset and a lease liability for all leases with terms greater than 12 months. The liability will be equal to the present value of the lease payments. The asset will be based on the liability, subject to adjustment. For income statement purposes, the leases will continue to be classified as either operating or finance. Operating leases will result in straight-line expense (similar to current operating leases) and finance leases will result in a front-loaded expense pattern (similar to current capital leases). The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted and the new standard must be adopted using the modified retrospective transition method, which includes a number of optional practical expedients that entities may elect to apply. The Company is currently assessing the impact of adoption of the new standard on its consolidated financial statements and related note disclosures.

In March 2016, the FASB issued ASU No. 2016-09, “Compensation – Stock Compensation (Topic 718).” The guidance amends certain aspects of accounting for employee share-based payment transactions, including accounting for income taxes related to those transactions. The guidance will require recognizing excess tax benefits and deficiencies on share-based awards in the tax provision, instead of in equity. Also, the guidance requires these amounts to be classified as an operating activity and shares withheld to satisfy employee taxes to be classified as a financing activity in the statement of cash flow, rather than as currently classified as financing and operating activities, respectively. The guidance is effective for annual reporting periods beginning after December 15, 2016 and interim periods within that reporting period. Early adoption is permitted. All provisions of the guidance must be adopted in the same period. The Company is currently evaluating the impact that adoption of the ASU will have on its consolidated financial statements and related disclosures. The guidance is required to be adopted as follows:

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Prospectively for the recognition of excess tax benefits and deficiencies in the tax provision

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Retrospectively or prospectively for the classification of income tax benefits and deficiencies in the statement of cash flow

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Retrospectively for the classification of shares withheld to satisfy employee taxes in the statement of cash flow