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New Accounting Standards
12 Months Ended
Dec. 31, 2018
New Accounting Pronouncements And Changes In Accounting Principles [Abstract]  
New Accounting Standards

2.    NEW ACCOUNTING STANDARDS

Adoption of New Accounting Standards

On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)” and all of the related amendments.  The Company adopted the standard using the full retrospective method, which did not require a cumulative effect adjustment to retained earnings. As a result of this adoption, there was no material impact on revenue recognition practices, income from continuing operations after taxes, net income or earnings per share.  See Note 3 for further discussion, including additional required qualitative and quantitative disclosures of our revenue recognition policies. 

In January 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-04, “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” ASU 2017-04 eliminates the two-step process that required identification of potential impairment and a separate measure of the actual impairment. The annual assessment of goodwill impairment will now be determined by using the difference between the carrying amount and the fair value of the reporting unit. Adoption is required beginning the first quarter of 2020 on a prospective basis, and early adoption is permitted.  The Company elected to adopt the new standard effective for the year ended 2018.

Accounting Standards Issued But Not Yet Adopted

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”, which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. The new standard establishes a right-of-use model (“ROU”) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement.

The new standard is effective for the Company on January 1, 2019.  The Company will adopt the standard on its effective date using the modified retrospective approach.

The standard provides several optional practical expedients in transition.  The Company expects to elect the ‘package of practical expedients’, which permits it to forgo reassessment of prior conclusions about lease identification, lease classification and initial direct costs for periods prior to the effective date.  Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019.  The Company does not expect to elect the use-of-hindsight or land easement practical expedients, the latter not being applicable to us.

The Company anticipates this standard will have a material effect on our financial statements.  The most significant effects will relate to the recognition of new ROU assets and liabilities on the balance sheet for real estate, vehicle and equipment leases, and new disclosures about leasing activities.  As of December 31, 2018, the Company expects to recognize between $32 million and $36 million of aggregate ROU assets and liabilities for operating leases on the effective date.

In June 2018, the FASB issued ASU 2018-07, “Improvements to Nonemployee Share-Based Payment Accounting.”  ASU 2018-07 more closely aligns the accounting for employee and nonemployee share-based payments.  This ASU is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2018. Early adoption is permitted.  The Company does not expect the standard to have a material impact on our consolidated financial statements.

In August 2018, the SEC adopted amendments to certain disclosure requirements in Securities Act Release No. 33-10532, “Disclosure Update and Simplification.” The amendments became effective on November 5, 2018. Among the amendments is the requirement to present the changes in shareholders’ equity in the interim financial statements (either in a separate statement or footnote) in quarterly reports on Form 10-Q. This reporting requirement will be effective for us beginning with the quarterly report for the period ended March 31, 2019.