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Summary of Significant Accounting Policies
9 Months Ended
Sep. 29, 2019
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies

The Company's significant accounting policies are disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018. Refer to Note 15. Leases, for the updated accounting policy on leases upon adoption of ASU 2016-02, "Leases" as of January 1, 2019.

Recent accounting pronouncements

Accounting Pronouncements Recently Adopted

ASU 2016-02

In February 2016, FASB issued ASU 2016-02, "Leases" (Topic 842), which requires a lessee to recognize on the balance sheets a right-of-use asset, representing its right to use the underlying asset for the lease term, and a corresponding lease liability. The liability is equal to the present value of lease payments while the right-of-use asset is based on the liability, subject to adjustment, such as for initial direct costs. In addition, ASU 2016-02 expands the disclosure requirements for lessees.

The Company adopted the new standard effective January 1, 2019 and was required to record a lease asset and lease liability related to its operating leases. The Company elected to utilize the alternative modified transition method, under which the cumulative-effect adjustment to the opening balance is recognized on the date of adoption while comparative prior periods continue to be reported under the guidance in effect prior to January 1, 2019. Accordingly, the Company did not restate or make related disclosures under the new standard for comparative prior periods in the period of adoption, and the Company applied the new lease standard prospectively to leases existing or commencing on or after January 1, 2019. The Company elected the package of practical expedients permitted under the transition guidance within the standard to not (1) reassess whether any expired or existing contracts are considered or contain leases; (2) reassess the lease classification for any expired or existing leases; and (3) reassess the initial direct costs for any existing leases. The Company made an accounting policy election to treat the lease and non-lease components in its office lease contracts as a single performance obligation to the extent that the timing and pattern of transfer are similar for the lease and non-lease components and the lease component qualifies as an operating lease. The Company also made an accounting policy election not to recognize lease liabilities and right-of-use assets for leases with a term of 12 months or less. The Company will recognize these lease payments on a straight-line basis over the lease term.

The following table summarizes the impact of adopting ASU 2016-02 on the Company’s unaudited condensed consolidated balance sheet for the fiscal year beginning January 1, 2019 as an adjustment to the opening balances:
 
As of
 
Adjustments
 
As of
 
December 31,
2018
 
 
January 1,
2019
 
(In thousands)
Assets:
 
 
 
 
 
Prepaid expenses and other current assets
$
35,997

 
$
(543
)
 
$
35,454

Total current assets
$
857,899

 
$
(543
)
 
$
857,356

Operating lease right-of-use assets, net
$

 
$
39,110

 
$
39,110

Total assets
$
1,043,376

 
$
38,567

 
$
1,081,943

Liabilities:
 
 
 
 
 
Other accrued liabilities
$
199,472

 
$
10,909

 
$
210,381

Total current liabilities
$
383,992

 
$
10,909

 
$
394,901

Non-current operating lease liabilities
$

 
$
33,823

 
$
33,823

Other non-current liabilities
$
12,232

 
$
(6,165
)
 
$
6,067

Total liabilities
$
415,824

 
$
38,567

 
$
454,391

Total liabilities and stockholders’ equity
$
1,043,376

 
$
38,567

 
$
1,081,943



The standard did not impact our statement of operations and cash flows.

Accounting Pronouncements Not Yet Effective

In June 2016, the FASB issued ASU 2016-13, "Measurement of Credit Losses on Financial Instruments" (Topic 326), which replaces the incurred-loss impairment methodology and requires immediate recognition of estimated credit losses expected to occur for most financial assets, including trade receivables. Credit losses on available-for-sale debt securities with unrealized losses will be recognized as allowances for credit losses limited to the amount by which fair value is below amortized cost. The Company will adopt the new standard when it becomes effective in the first fiscal quarter of 2020. The Company is currently in the process of developing new credit loss models and updating its controls in preparation for the adoption. Based on the composition of the Company’s investment portfolio, current market conditions, and historical credit loss activity, the Company does not expect that it will have material impacts on its financial position, results of operations or cash flows.

With the exception of the new standard discussed above, there have been no other new accounting pronouncements that have significance, or potential significance, to the Company's financial position, results of operations and cash flows.