Recent Accounting Pronouncements Adoption of New Accounting Standards The Company adopted the following Accounting Standard Updates (ASU) in the first quarter of 2019, all of which were effective as of January 1, 2019. The adoption of these standards had no impact on the unaudited Consolidated Financial Statements or the related Notes to the unaudited Consolidated Financial Statements. | | | Standards Adopted | Description | ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting | The standard provides an expanded scope of Topic 718, to include share-based payment transactions for acquiring goods and services from nonemployees. | ASU 2018-02, Reporting Comprehensive Income: Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income | The standard permits entities to reclassify tax effects stranded in accumulated other comprehensive income as a result of tax reform to retained earnings. | ASU 2017-11, Distinguishing Liabilities from Equity; Derivatives and Hedging | The standard eliminates the requirement to consider “down round” features when determining whether certain equity-linked financial instruments or embedded features are indexed to an entity’s own stock. |
On January 1, 2019, the Company adopted ASU 2016-02, “Leases (Topics 842),” which requires lessees to recognize lease liabilities and right-of-use assets on the balance sheet for not only finance (previously capital) leases but also operating leases. The standard also requires additional quantitative and qualitative disclosures. The Company adopted the standard using the modified retrospective transition approach without adjusting comparative periods. The Company elected certain of the practical expedients permitted under the transition guidance within the new standard as follows: | | • | A package of practical expedients to not reassess: |
| | ◦ | Whether a contract is or contains a lease |
| | • | A practical expedient to not reassess certain land easements |
The Company has implemented internal controls and lease accounting software to enable the quantification of the expected impact on the unaudited Consolidated Balance Sheets and to facilitate the calculations of the related accounting entries and disclosures. Adoption of the lease standard resulted in recognition of right-to-use assets and lease liabilities of $16.0 million as of January 1, 2019. Adoption of the lease standard had no impact on the Company’s debt-covenant compliance under its current agreements. Also, the standard did not materially affect the Company’s results of operations or its cash flows. Refer to “Note 11 - Leases” for additional information. Accounting Standards Issued But Not Yet Adopted The Company has considered the recent ASUs issued by the Financial Accounting Standards Board summarized below: | | | | | Standard Pending Adoption | Description | Effective Date | Anticipated Impact | ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) | The standard aligns the requirements for capitalizing implementation costs in cloud computing software arrangements with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. | January 1, 2020 | The Company plans on adopting this ASU using the prospective method. The Company does not expect the ASU to have a material impact on its results of operations or financial condition. | ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20) | The standard eliminates, modifies and adds disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. | January 1, 2021 | The Company is currently evaluating the impact of the adoption of this ASU on its results of operations and financial condition.
| ASU 2018-13, Fair Value Measurement (Topic 820) | The standard eliminates, modifies and adds disclosure requirements for fair value measurements. | January 1, 2020 | The Company does not expect the ASU to have a material impact on its results of operations or financial condition.
| ASU 2016-13, Measurement of Credit Losses on Financial Instruments | The standard changes how entities will measure credit losses for most financial assets, including trade and other receivables and replaces the current incurred loss approach with an expected loss model. | January 1, 2020 | The Company does not expect the ASU to have a material impact on its results of operations or financial condition.
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