Recently Issued Accounting Pronouncements



Date Issued	Reference	Description	Expected Adoption Date and Method	Financial Statement Impact
January 2017	2017-04: Intangibles – Goodwill and Other (Topic 350) Simplifying the Test for Goodwill Impairment	The amendments in this ASU are intended to simplify subsequent measurement of goodwill. The key amendment in the ASU eliminates Step 2 from the goodwill impairment test, in which entities measured a goodwill impairment loss by comparing the implied fair value to the carrying amount of a reporting unit's goodwill. Instead, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value with the carrying amount of a reporting unit and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value.	January 2020, prospective	Currently under evaluation; not expected to be material
January 2017	2017-03: Accounting Changes and Error Corrections (Topic 250) and Investments – Equity Method and Joint Ventures (Topic 323) – Amendments to SEC Paragraphs Pursuant to Staff Announcements at the September 22, 2016 and November 17, 2016 EITF Meetings	The amendments in this ASU that are relevant to the Company pertain to disclosures around the impact that recently issued accounting standards will have on the financial statements of a registrant when such standards are adopted in a future period. The amendments in this ASU indicate that the SEC staff expects that if an entity cannot reasonably estimate the impact of an ASU on the financial statements, then the entity should consider additional qualitative disclosures to assist the reader in assessing the significance of the standard's impact on its financial statements.	Immediate	None - The Company's policy on disclosing recently issued accounting pronouncements is aligned with the amendments in this ASU.
November 2016	2016-18: Statement of Cash Flows – (Topic 230) Restricted Cash (a Consensus of the FASB Emerging Issues Task Force)	The amendments in this ASU require transfers between cash and equivalents and restricted cash and equivalents, as well as direct cash receipts into and cash payments made from restricted cash and equivalents to be explained in the statement of cash flows. Restricted cash and restricted cash equivalents are to be included in the beginning and ending cash and cash equivalent balance totals on the statement of cash flows.	January 2018; Retrospective	Material impact in cash flow presentation to reclassify restricted cash to "net increase/decrease in cash, restricted cash, and equivalents," and adjust the beginning and ending balances.
October 2016	2016-17: Consolidation (Topic 810) – Interests Held through Related Parties that are under Common Control	This ASU updates the consolidation guidance on how a reporting entity that is a single decision maker of a Variable Interest Entity ('VIE") should treat indirect interests in the entity held through related parties that are under common control when determining whether it is the primary beneficiary of the VIE. The primary beneficiary of a VIE is the reporting entity that has a controlling financial interest in a VIE and, therefore, consolidates the VIE. A reporting entity that has an indirect interest in a VIE if it has a direct interest in a related party that, in turn has a direct interest in the VIE.	January 2017, Modified Retrospective	No financial statement impact. The Company is not the primary beneficiary of any of its related parties.



Date Issued	Reference	Description	Expected Adoption Date and Method	Financial Statement Impact
October 2016	2016-16: Income Taxes (Topic 740) – Intra-entity Transfers of Assets Other than Inventory	This ASU states that entities should recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs (as compared to current GAAP, which prohibits the recognition of current and deferred income taxes for intra-entity asset transfer until the asset has been sold to an outside party).	January 2018, Modified Retrospective	Currently under evaluation; not expected to be material since the Company's fixed assets are not typically transferred between legal entities for consideration.
August 2016	2016-15: Statement of Cash Flows (Topic 230) – Classification of Certain Cash Receipts and Cash Payments	This ASU has several amendments, which are designed to reduce existing diversity in practice of how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The ASU addresses eight specific cash flow issues, of which the following are expected to be applicable to Swift: 1) debt prepayment and extinguishment costs, 2) proceeds from settlement of insurance claims, 3) proceeds from settlement of corporate-owned life insurance policies, 4) beneficial interests in securitization transactions, and 5) separately identifiable cash flows and application of the predominance principle.	January 2018, Retrospective	Currently under evaluation; not expected to be material.
June 2016	2016-13: Financial Instruments – Credit Losses (Topic 326) – Measurement of Credit Losses on Financial Instruments	The purpose of this ASU is to amend the current incurred loss impairment methodology with a new methodology that reflects expected credit losses and requires a broader range of reasonable and supportable information to inform credit loss estimates. This is the final credit accounting standard, out of a series, with detailed guidance on the new loss reserve model, Current Expected Credit Loss ("CECL"). Among other provisions, the amendments in the ASU require a financial asset (or group of assets) measured at amortized cost basis to be presented at the net amount expected to be collected. Entities are no longer required to wait until a loss is probable to record it.	January 2020, Adoption method varies by amendment	Currently under evaluation; not expected to be material.
May 2016	2016-12: Revenue from Contracts with Customers (Topic 606) – Narrow-scope Improvements and Practical Expedients	The amendments in this ASU clarify certain aspects regarding the collectibility criterion, sales taxes collected from customers, noncash consideration, contract modifications, and completed contracts at transition. It additionally clarifies that retrospective application only requires disclosure of the accounting change effect on prior periods presented, not on the period of adoption.	January 2018, Modified retrospective	Currently under evaluation ⁽¹⁾
April 2016	2016-10: Revenue from Contracts with Customers (Topic 606) – Identifying Performance Obligations and Licensing	The amendments in this ASU clarify the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. The amendments do not change the core principle of the guidance.	January 2018, Modified retrospective	Currently under evaluation ⁽¹⁾
March 2016	2016-08: Revenue from Contracts with Customers (Topic 606) – Principal versus Agent Considerations (Reporting Revenue Gross versus Net)	The amendments in this ASU are intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations, but do not change the core principle of the guidance.	January 2018, Modified retrospective	Currently under evaluation ⁽¹⁾



Date Issued	Reference	Description	Expected Adoption Date and Method	Financial Statement Impact
March 2016	2016-09: Compensation – Stock Compensation (Topic 718) – Improvements to Employee Share-based Payment Accounting	The amendments in this ASU are intended to simplify various aspects of accounting for stock-based compensation, including income tax consequences, classification of awards as equity or liability, as well as classification of activities within the statement of cash flows.	January 2017, Adoption method varies by amendment	Expected to be material⁽²⁾
February 2016	2016-02: Leases (Topic 842)	The new standard requires lessees to recognize assets and liabilities arising from both operating and financing leases on the balance sheet. Lessor accounting for leases is largely unaffected by the new guidance.	January 2019, Modified retrospective	Currently under evaluation; expected to be material, but not yet quantifiable.
January 2016	2016-01: Financial Instruments – Overall (Subtopic 825-10) – Recognition and Measurement of Financial Assets and Financial Liabilities	The amendments in this ASU address various aspects of recognition, measurement, presentation, and disclosure of financial instruments. They additionally establish ASC Topic 321 – Investments – Equity Securities, which applies to investments in equity securities and other ownership interests in an entity, including investments in partnerships, unincorporated joint ventures, and limited liability companies.	January 2018, Modified retrospective	Not expected to be material.
August 2015	2015-14: Revenue from Contracts with Customers (Topic 606) – Deferral of the Effective Date	This ASU deferred the effective date of ASU 2014-09 (Topic 606) to annual reporting periods beginning after December 15, 2017.	January 2018, Modified retrospective	Currently under evaluation⁽¹⁾
July 2015	2015-11: Inventory (Topic 330) – Simplifying the Measurement of Inventory	The amendments in this ASU simplify subsequent measurement of inventory for all inventory measurement methods, except for last-in-first-out. Entities will be required to measure inventory at the lower of cost and net realizable value, instead of the previously issued guidance of lower of cost or market.	January 2017, prospective	Not expected to be material. Due to the nature of the Company's inventory balances (spare parts, tires, fuel, and supplies), inventory is predominantly stated at cost.

____________

(1)

Management is in the diagnostic phase of assessing the financial and business impacts of implementing ASC Topic 606, Revenue from Contracts with Customers, including identifying revenue sources within the Company's lines of business, reviewing a sample of contracts, and developing a preliminary assessment. Based upon these preliminary procedures, management anticipates that the following key considerations will impact the Company's accounting and reporting under the new standard:


•	identification of what constitutes a contract in Swift's business practices,


•	variability in individual contracts, such as customer-specific terms that may vary from the master agreement,


•	principal versus agent determinations,


•	timing of revenue recognition (for example, point-in-time versus over time and/or accelerated versus deferred),


•	single versus multiple performance obligations,


•	new/changed estimates and management judgments (for example, system estimation of in-transit accruals versus manual estimation),


•	disaggregation of revenue by category within segments, and


•	others.

Management expects that there will also be changes in sales, contracting, accounting, reporting, tax, debt covenants, and other business processes, policies, and controls, as a result of implementing ASC Topic 606. The Company is currently underway with implementing a new ERP system, which will also affect the implementation process.

Based on the information currently available from the diagnostic phase, management cannot yet determine the quantitative impact on the financial statements; however, the impact is expected to be immaterial (potentially with changes only to the timing of revenue recognition between reportable periods, as well as changes in the requirements for accounting policy and other new disclosures). The financial impact is expected to be quantifiable by the time the Company files its first Quarterly Report on Form 10-Q in 2017, at which time the Company will be transitioning into the design and planning phase of implementing ASC Topic 606. Since we are continuing to evaluate the impact of ASC Topic 606, our disclosures around our preliminary assessments are subject to change.


(2)	The amendments to ASC Topic 718, Compensation – Stock Compensation, that are expected to affect the Company are discussed below.

•

Accounting for Income Tax Benefits/Deficiencies: All excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) should be recognized as income tax expense or benefit in the income statement. The tax effects of exercised or vested awards should be treated as discrete items in the reporting period in which they occur. An entity should also recognize excess tax benefits regardless of whether the benefit reduces taxes payable in the current period. Modified retrospective application is required, by means of a cumulative-effect adjustment to equity.

Upon adoption, the Company will need to reclassify approximately $16.8 million in historical net tax benefit/deficiency amounts previously recorded within additional paid-in capital into retained earnings/accumulated deficit. Going forward, tax benefit/deficiency amounts will be recorded in net income.


•	Classification of Excess Tax Benefits on the Statement of Cash Flows: Excess tax benefits should be classified along with other income tax cash flows as an operating activity. Application is permitted to be prospective or retrospective.

Current GAAP requires classification within cash flows from financing activities. The Company presents its statement of cash flows using the indirect method, which presents excess tax benefits within cash flows from financing activities and a corresponding offset within the net income reconciliation of cash flows from operating activities. As such, the Company will need to reclassify the excess tax benefit amounts out of cash flows from financing activities and into cash flows from operating activities, upon adoption. Management expects to apply these amendments retrospectively.


•	Forfeitures: An entity can make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest (current GAAP) or account for forfeitures when they occur. Modified retrospective application is required, by means of a cumulative-effect adjustment to equity.

Upon adoption, the Company expects to transition to accounting for forfeitures when they occur. This would result in approximately a $2.5 million unfavorable cumulative-effect adjustment to retained earnings/accumulated deficit to catch-up the previously unrecognized stock-based compensation associated with historical assumed forfeiture rates. Going forward, forfeitures will be recorded as favorable adjustments to stock-based compensation as they occur.


•	Classification of Employee Taxes Paid on the Statement of Cash Flows When an Employer Withholds Shares for Tax-withholding purposes: Cash paid by an employer when directly withholding shares for tax-withholding purposes should be classified as a financing activity. Retrospective application is required.

Beginning in 2016, the Company began allowing certain members of management to have shares withheld for taxes when their restricted stock awards and performance units vest. As such, upon adopting the amendments in this ASU, the Company will need to present the amounts out of cash flows from operating activities and into cash flows from financing activities for the periods presented. For 2016, the amount was approximately $0.5 million.