Summary of Significant Accounting Policies

Basis of Presentation

– Cohu, Inc. (“Cohu”, “we”, “our”, “us” and the “Company”), through our wholly owned subsidiaries, is a provider of semiconductor test equipment and services. Our Consolidated Financial Statements include the accounts of Cohu and our wholly owned subsidiaries and variable interest entities (“VIEs”) for which we are the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation. We evaluate the need to consolidate affiliates based on standards set forth in ASC Topic

810,

Consolidation

(“ASC

810”

December 28, 2019,

we divested our entire

20%

interest in ALBS Solutions Sdn Bhd (“ALBS”), our only consolidated VIE. As a result of the divestment, we determined that we

longer had a controlling interest in ALBS and we

longer consolidate ALBS as of that date. Divestment of our ownership interest resulted in a gain of

$0.1

million which is included in restructuring charges for the year ended

December 28, 2019.

All significant consolidated transactions and balances have been eliminated in consolidation.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates.

Our fiscal years are based on a

- or

-week period ending on the last Saturday in

December.

Our current fiscal year, which ended on

December 28, 2019,

consisted of

weeks. Our fiscal years ended on

December 29, 2018,

and

December 30, 2017,

each consisted of

weeks.

Principles of Consolidation for Variable Interest Entities

– Prior to the divestment of our ownership interest in ALBS we followed ASC Topic

810

guidance with respect to accounting for VIEs and as of

December 28, 2019,

we consolidated

one

VIE, ALBS.

Discontinued Operations

– Management determined that the fixtures services business, that was acquired as part of Xcerra, did

not

align with Cohu’s long-term strategic plan and divested this portion of the business in

February 2020.

As a result, the assets of our fixtures business are considered “held for sale” and the operations of our fixtures business are considered “discontinued operations” as of

December 28, 2019.

See Note

13,

“Discontinued Operations” for additional information. Unless otherwise indicated, all amounts herein relate to continuing operations.

Income (Loss

) Per Share

– Basic income (loss) per common share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the reporting period. Diluted income (loss) per share includes the dilutive effect of common shares potentially issuable upon the exercise of stock options, vesting of outstanding restricted stock and performance stock units and issuance of stock under our employee stock purchase plan using the treasury stock method. In loss periods, potentially dilutive securities are excluded from the per share computations due to their anti-dilutive effect. For purposes of computing diluted income (loss) per share, stock options with exercise prices that exceed the average fair market value of our common stock for the period are excluded. For the years ended

December 28, 2019,

December 29, 2018

and

December 30, 2017,

approximately

422,000,

146,000

and

77,000

shares, respectively, of our common stock were excluded from the computation.

The following table reconciles the denominators used in computing basic and diluted income (loss) per share:

(in thousands)	2019		2018		2017
Weighted average common shares outstanding		41,159		31,776		27,836
Effect of dilutive stock options and restricted stock units		-		-		1,080
		41,159		31,776		28,916

Cohu has utilized the “control number” concept in the computation of diluted earnings per share to determine whether potential common stock instruments are dilutive. The control number used is income from continuing operations. The control number concept requires that the same number of potentially dilutive securities applied in computing diluted earnings per share from continuing operations be applied to all other categories of income or loss, regardless of their anti-dilutive effect on such categories.

Cash, Cash Equivalents and Short-term Investments

– Highly liquid investments with insignificant interest rate risk and original maturities of

three

months or less are classified as cash and cash equivalents. Investments with maturities greater than

three

months are classified as short-term investments. All of our short-term investments are classified as available-for-sale and are reported at fair value, with any unrealized gains and losses, net of tax, recorded in the statement of comprehensive income (loss). We manage our cash equivalents and short-term investments as a single portfolio of highly marketable securities. We have the ability and intent, if necessary, to liquidate any of our investments in order to meet the liquidity needs of our current operations during the next

months. Accordingly, investments with contractual maturities greater than

one

year have been classified as current assets in the accompanying consolidated balance sheets.

Fair Value of Financial Instruments

– The carrying amounts of our financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, approximate fair value due to the short maturities of these financial instruments.

Concentration of Credit Risk

– Financial instruments that potentially subject us to significant credit risk consist principally of cash equivalents, short-term investments and trade accounts receivable. We invest in a variety of financial instruments and, by policy, limit the amount of credit exposure with any

one

issuer.

Trade accounts receivable are presented net of allowance for doubtful accounts, which were insignificant at

December 28, 2019

and

December 29, 2018.

Our customers primarily include semiconductor manufacturers and semiconductor test subcontractors located throughout many areas of the world. While we believe that our allowance for doubtful accounts is adequate and represents our best estimate of potential loss exposure at

December 28, 2019,

we will continue to monitor customer liquidity and other economic conditions, which

may

result in changes to our estimates regarding collectability.

Inventories

– Inventories are stated at the lower of cost, determined on a

first

-in,

first

-out basis, or net realizable value. Cost includes labor, material and overhead costs. Determining market value of inventories involves numerous estimates and judgments including projecting average selling prices and sales volumes for future periods and costs to complete and dispose of inventory. As a result of these analyses, we record a charge to cost of sales in advance of the period when the inventory is sold when estimated market values are below our costs. Charges to cost of sales for excess and obsolete inventories totaled

$4.8

million in

2019.

Included in this amount is

$0.7

million of inventory charges related to the decision to end manufacturing of certain of Xcerra’s semiconductor test handler products. Charges to cost of sales for excess and obsolete inventories totaled

$10.8

million in

2018.

Included in this amount is

$9.4

million of inventory charges related to the decision to end manufacturing of certain of Xcerra’s semiconductor test handler products. In

2017

we recorded charges of

$1.1

million.

Inventories by category were as follows

(in thousands)

	December 28,		December 29,
	2019		2018
Raw materials and purchased parts	$	69,665	$	60,112
Work in process		46,591		57,953
Finished goods		14,450		21,249
Total inventories	$	130,706	$	139,314

Assets Held for Sale –

We expect to complete the sale of our facility located in Penang, Malaysia in the

first

half of

2020

and, as a result, it is being presented as held for sale at

December 28, 2019.

Property, Plant and Equipment

– Depreciation and amortization of property, plant and equipment, both owned and under financing lease, is calculated principally on the straight-line method based on estimated useful lives of

thirty

forty

years for buildings,

five

fifteen

years for building improvements,

three

ten

years for machinery, equipment and software and the lease life for financing leases. Land is

not

depreciated.

Property, plant and equipment, at cost, consisted of the following

(in thousands)

	December 28,			December 29,
	2019			2018
Land and land improvements (1)	$	11,659		$	11,905
Buildings and building improvements (1)		41,474			37,265
Machinery and equipment		61,006			64,791
		114,139			113,961
Less accumulated depreciation and amortization		(43,227	)		(39,629	)
Property, plant and equipment, net	$	70,912		$	74,332

(

)

Includes assets under financing leases acquired with Xcerra totaling

$2.6

million and

$2.7

million as of

December 28, 2019

and

December 29, 2018,

respectively.

December 9, 2019,

we committed to exercise our bargain purchase option to acquire our leased facility located in Rosenheim, Germany, currently subject to a financing lease, for

€1.1

million

later than

June 30, 2020.

Depreciation expense was

$19.3

million in

2019,

$8.8

million in

2018

and

$5.0

million in

2017.

The increase in depreciation expense in

2019

was driven by depreciation recorded on assets acquired from Xcerra.

Cloud Computing Implementation Costs

– We have capitalized certain costs associated with the implementation of our new cloud-based Enterprise Resource Planning (“ERP”) system in accordance with ASU

2018

15,

Intangibles—Goodwill and Other—Internal-Use Software (Subtopic

350

) Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract

. Capitalized costs include only external direct costs of materials and services consumed in developing of the system and interest costs incurred, when material, while developing the system.

Total unamortized capitalized cloud computing implementation costs totaled

$10.3

million at

December 28, 2019

and were insignificant at

December 29, 2018.

We expect to begin amortizing these costs when the ERP system is placed into service in

2020,

and will amortize the implementation costs using the straight-line method over

seven

years. Capitalized amounts are recorded within other assets in our consolidated balance sheets.

Segment Information

– We applied the provisions of ASC Topic

280,

Segment Reporting

, (“ASC

280”

), which sets forth a management approach to segment reporting and establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products, major customers and the geographies in which the entity holds material assets and reports revenue. An operating segment is defined as a component that engages in business activities whose operating results are reviewed by the chief operating decision maker and for which discrete financial information is available. Subsequent to the acquisition of Xcerra on

October 1, 2018,

we have determined that our

four

identified operating segments are: Test Handler Group (“THG”), Semiconductor Tester Group (“STG”), Interface Solutions Group (“ISG”) and PCB Test Group (“PTG”). Our THG, STG and ISG operating segments qualify for aggregation under ASC

280

due to similarities in their customers, their economic characteristics, and the nature of products and services provided. As a result, we report in

two

segments, Semiconductor Test and Inspection Equipment (“Semiconductor Test & Inspection”) and PCB Test Equipment (“PCB Test”).

Goodwill, Purchased Intangible Assets and Other Long-lived Assets

– We evaluate goodwill for impairment annually and when an event occurs or circumstances change that indicate that the carrying value

may

not

be recoverable. We test goodwill for impairment by comparing the book value of net assets to the fair value of the reporting units. If the fair value is determined to be less than the book value, an impairment charge is recognized as the amount by which the carrying amount of goodwill exceeds the reporting unit's fair value,

not

to exceed the carrying amount of goodwill. We estimated the fair values of our reporting units primarily using the income approach valuation methodology that includes the discounted cash flow method, taking into consideration the market approach and certain market multiples as a validation of the values derived using the discounted cash flow methodology. Forecasts of future cash flows are based on our best estimate of future net sales and operating expenses, based primarily on customer forecasts, industry trade organization data and general economic conditions.

We conduct our annual impairment test as of

October

1st

of each year, and have determined there was

impairment as of

October

2019,

as we determined that the estimated fair values of our reporting units exceeded their carrying values on that date. Other events and changes in circumstances

may

also require goodwill to be tested for impairment between annual measurement dates. As of

December 28, 2019,

we do

not

believe that circumstances have occurred that indicate impairment of our goodwill is more-likely-than-

not.

In the event we determine that an interim goodwill impairment review is required, in a future period, the review

may

result in an impairment charge, which would have a negative impact on our results of operations.

Long-lived assets, other than goodwill, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets might

not

be recoverable. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or any other significant adverse change that would indicate that the carrying amount of an asset or group of assets

may

not

be recoverable. For long-lived assets, impairment losses are only recorded if the asset’s carrying amount is

not

recoverable through its undiscounted, probability-weighted future cash flows. We measure the impairment loss based on the difference between the carrying amount and estimated fair value.

Product Warranty

– Product warranty costs are accrued in the period sales are recognized. Our products are generally sold with standard warranty periods, which differ by product, ranging from

months. Parts and labor are typically covered under the terms of the warranty agreement. Our warranty expense accruals are based on historical and estimated costs by product and configuration. From time-to-time we offer customers extended warranties beyond the standard warranty period. In those situations, the revenue relating to the extended warranty is deferred at its estimated fair value and recognized on a straight-line basis over the contract period. Costs associated with our extended warranty contracts are expensed as incurred.

Income Taxes

– We assess our income tax positions and record tax benefits for all years subject to examination based upon management’s evaluation of the facts, circumstances and information available at the reporting dates. For those tax positions where it is more-likely-than-

not

that a tax benefit will be sustained, we have recorded the largest amount of tax benefit with a greater than

percent likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is

not

more-likely-than-

not

that a tax benefit will be sustained,

tax benefit has been recognized in the financial statements. Where applicable, associated interest and penalties have also been recognized and recorded, net of federal and state tax benefits, in income tax expense.

The U.S. Tax Cuts and Jobs Act (“Tax Act”) was enacted on

December 22, 2017.

The accounting for the tax effects of the enactment of the Tax Act was completed in

2018.

Contingencies and Litigation

– We assess the probability of adverse judgments in connection with current and threatened litigation. We would accrue the cost of an adverse judgment if, in our estimation, the adverse outcome is probable, and we can reasonably estimate the ultimate cost.

Adoption of New Revenue Accounting Standard

– We adopted ASC Topic

606,

Revenue from Contracts with Customers (“ASC

606”

)

, on

December 31, 2017,

the

first

day of our

2018

fiscal year. We elected to implement the new standard using the modified retrospective method of adoption which only applies to those contracts which were

not

completed as of

December 31, 2017.

Revenue for the years ended

December 28, 2019

and

December 29, 2018,

have been accounted for using ASC

606

and the prior year ended

December 30, 2017,

has

not

been adjusted. Upon adoption of ASC

606,

we recorded a cumulative-effect adjustment to retained earnings of

$1.1

million on

December 31, 2017,

which represents the impact of ASC

606

on our deferred revenue.

The adoption of ASC

606

had

impact to cash used in net operating, investing or financing activities in our consolidated statements of cash flows.

Under ASC

606

our revenue will continue to be recognized at a point in time when the performance obligation has been satisfied and transfer of control has occurred, typically, this occurs upon shipment of products to our customers. In certain instances, when customer payment terms provide that a minority portion of the equipment purchase price be paid only upon customer acceptance, recognition of revenue

may

occur sooner under ASC

606.

Revenue Recognition

– Our net sales are derived from the sale of products and services and are adjusted for estimated returns and allowances, which historically have been insignificant. We recognize revenue when the obligations under the terms of a contract with our customers are satisfied; generally, this occurs with the transfer of control of our systems, non-system products or services. In circumstances where control is

not

transferred until destination or acceptance, we defer revenue recognition until such events occur.

Revenue for established products that have previously satisfied a customer’s acceptance requirements is generally recognized upon shipment. In cases where a prior history of customer acceptance cannot be demonstrated or from sales where customer payment dates are

not

determinable and in the case of new products, revenue and cost of sales are deferred until customer acceptance has been received. Our post-shipment obligations typically include installation and standard warranties. The estimated fair value of installation related revenue is recognized in the period the installation is performed. Service revenue is recognized over time as we transfer control to our customer for the related contract or upon completion of the services if they are short-term in nature. Spares, contactor and kit revenue is generally recognized upon shipment.

Certain of our equipment sales have multiple performance obligations. These arrangements involve the delivery or performance of multiple performance obligations, and transfer of control of performance obligations

may

occur at different points in time or over different periods of time. For arrangements containing multiple performance obligations, the revenue relating to the undelivered performance obligation is deferred using the relative standalone selling price method utilizing estimated sales prices until satisfaction of the deferred performance obligation.

Unsatisfied performance obligations primarily represent contracts for products with future delivery dates. At

December 28, 2019

and

December 29, 2018,

we had

$10.0

million and

$19.1

million of revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied), respectively.

We generally sell our equipment with a product warranty. The product warranty provides assurance to customers that delivered products are as specified in the contract (an “assurance-type warranty”). Therefore, we account for such product warranties under ASC

460,

Guarantees (“ASC

460”

)

, and

not

as a separate performance obligation.

The transaction price reflects our expectations about the consideration we will be entitled to receive from the customer and

may

include fixed or variable amounts. Fixed consideration primarily includes sales to customers that are known as of the end of the reporting period. Variable consideration includes sales in which the amount of consideration that we will receive is unknown as of the end of a reporting period. Variable consideration arrangements are rare; however, when they occur, we estimate variable consideration as the expected value to which we expect to be entitled. Included in the transaction price estimate are amounts in which it is probable that a significant reversal of cumulative revenue recognized will

not

occur when the uncertainty associated with the variable consideration is subsequently resolved. Variable consideration that does

not

meet revenue recognition criteria is deferred.

Our contracts are typically less than

one

year in duration and we have elected to use the practical expedient available in ASC

606

to expense cost to obtain contracts as they are incurred because they would be amortized over less than

one

year.

Accounts receivable represents our unconditional right to receive consideration from our customers. Payments terms do

not

exceed

one

year from the invoice date and therefore do

not

include a significant financing component. To date, there have been

material impairment losses on accounts receivable. There were

material contract assets or contract liabilities recorded on the consolidated balance sheet in any of the periods presented.

On shipments where sales are

not

recognized, gross profit is generally recorded as deferred profit in our consolidated balance sheet representing the difference between the receivable recorded and the inventory shipped. In certain instances where customer payments are received prior to product shipment, the customer’s payments are recorded as customer advances. At

December 28, 2019,

we had deferred revenue totaling approximately

$16.1

million, current deferred profit of

$7.6

million and deferred profit expected to be recognized after

one

year included in noncurrent other accrued liabilities of

$7.2

million. At

December 29, 2018,

we had deferred revenue totaling approximately

$10.8

million, current deferred profit of

$6.9

million and deferred profit expected to be recognized after

one

year included in noncurrent other accrued liabilities of

$2.0

million. Our balances at

December 29, 2018,

include a

$1.1

million beginning retained earnings adjustment as a result of our adoption of ASC

606

on the

first

day of fiscal

2018.

The periodic change is primarily a result of increases and decreases in deferrals of revenue associated with product shipments made to our customers in accordance with our revenue recognition policy.

Net sales by type and segment are as follows

(in thousands)

	Twelve Months Ended
Disaggregated Net Sales	December 28, 2019		December 29, 2018		December 30, 2017
Systems-Semiconductor Test & Inspection	$	299,473	$	249,514	$	197,454
Non-systems-Semiconductor Test & Inspection		241,405		193,737		155,250
Systems-PCB Test		25,928		6,565		-
Non-systems-PCB Test		16,523		1,952		-
Net sales	$	583,329	$	451,768	$	352,704

Advertising Costs

– Advertising costs are expensed as incurred and were

not

material for all periods presented.

Restructuring Costs

–

We record restructuring activities including costs for

one

-time termination benefits in accordance with ASC Topic

420

(“ASC

420”

Exit or Disposal Cost Obligations.

The timing of recognition for severance costs accounted for under ASC

420

depends on whether employees are required to render service until they are terminated in order to receive the termination benefits. If employees are required to render service until they are terminated in order to receive the termination benefits, a liability is recognized ratably over the future service period. Otherwise, a liability is recognized when management has committed to a restructuring plan and has communicated those actions to employees. Employee termination benefits covered by existing benefit arrangements are recorded in accordance with ASC Topic

712,

Nonretirement Postemployment Benefits.

These costs are recognized when management has committed to a restructuring plan and the severance costs are probable and estimable.

Debt Issuance Costs

– We capitalize costs related to the issuance of debt. Debt issuance costs directly related to our Term B Loan are presented within noncurrent liabilities as a reduction of long-term debt in our consolidated balance sheets. The amortization of such costs is recognized as interest expense using the effective interest method over the term of the respective debt issue. Amortization related to deferred debt issuance costs and original discount costs was

$1.1

million and insignificant for the years ended

December 28, 2019

and

December 29, 2018,

respectively.

Share-based Compensation

– We measure and recognize all share-based compensation under the fair value method. Our estimate of share-based compensation expense requires a number of complex and subjective assumptions including our stock price volatility, employee exercise patterns (expected life of the options) and related tax effects. The assumptions used in calculating the fair value of share-based awards represent our best estimates, but these estimates involve inherent uncertainties and the application of management judgment. Although we believe the assumptions and estimates we have made are reasonable and appropriate, changes in assumptions could materially impact our reported financial results.

Foreign Remeasurement and Currency Translation

– Assets and liabilities of our wholly owned foreign subsidiaries that use the U.S. Dollar as their functional currency are re-measured using exchange rates in effect at the end of the period, except for nonmonetary assets, such as inventories and property, plant and equipment, which are re-measured using historical exchange rates. Revenues and costs are re-measured using average exchange rates for the period, except for costs related to those balance sheet items that are re-measured using historical exchange rates. Gains and losses on foreign currency transactions are recognized as incurred. During the year ended

December 28, 2019,

foreign exchange gains included in our consolidated statement of operations were insignificant. During the year ended

December 29, 2018,

we recognized foreign exchange gains totaling

$1.7

million. During the year ended

December 30, 2017,

we recognized foreign exchange losses totaling

$3.0

million.

Certain of our foreign subsidiaries have designated the local currency as their functional currency and, as a result, their assets and liabilities are translated at the rate of exchange at the balance sheet date, while revenue and expenses are translated using the average exchange rate for the period. Cumulative translation adjustments resulting from the translation of the financial statements are included as a separate component of stockholders’ equity.

Accumulated Other Comprehensive Loss

– Our accumulated other comprehensive loss totaled approximately

$34.0

million at

December 28, 2019,

and

$25.9

million at

December 29, 2018,

and was attributed to, net of income taxes where applicable: foreign currency adjustments resulting from the translation of certain accounts into U.S. Dollars, unrealized losses and gains on investments and adjustments to accumulated postretirement benefit obligations. The U.S. Dollar strengthened relative to certain foreign currencies in countries where we have operations as of

December 28, 2019,

compared to

December 29, 2018

and consequently, our accumulated other comprehensive loss increased by

$7.5

million. Similarly, in the previous year, the U.S. Dollar strengthened relative to certain foreign currencies in countries where we have operations and, as a result, our accumulated other comprehensive loss increased by

$8.9

million. Additional information related to accumulated other comprehensive loss, on an after-tax basis is included in Note

14.

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

– We adopted ASU

2016

02,

Leases (Topic

842

)

, as of

December 30, 2018,

using the optional transition method which allowed us to record existing leases at adoption and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption rather than in the earliest period presented. We elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allows us to carryforward the historical lease classification.

We made an accounting policy election to

not

record right of use ("ROU") assets and lease liabilities for leases with an initial term of

months or less. We recognized those lease payments in our consolidated statements of operations on a straight-line basis over the lease term. We also made an accounting policy election to use the practical expedient allowed in the standard to

not

separate lease and non-lease components when calculating the ROU asset and lease liability. Related to adoption of the new standard, we have implemented internal controls and a lease accounting technology system to track the ROU asset and lease liability balances and prepare the related footnote disclosures.

Adoption of the new standard resulted in the recording of additional net lease assets and lease liabilities of approximately

$30.7

million and

$29.9

million, respectively, as of

December 30, 2018.

We had previously recorded a sale and operating leaseback transaction in accordance with Topic

840

and as a result of the adoption of the new standard, recognized

$10.2

million of deferred gain as an adjustment to retained earnings. In addition, we had previously recognized assets and liabilities related to a build-to-suit designation under Topic

840

and as a result of the adoption of the new standard, derecognized assets and liabilities of

$0.5

million and

$0.6

million, respectively, with the difference recorded as an adjustment to retained earnings. The standard did

not

materially impact our consolidated net earnings and had

impact on cash flows.

Recently Issued Accounting Pronouncements

– In

June 2016,

the FASB issued ASU

2016

13,

Financial Instruments-Credit Losses (Topic

326

): Measurement of Credit Losses on Financial Instruments

. ASU

2016

was subsequently amended by ASU

2019

04,

Codification Improvements to Topic

326,

Financial Instruments-Credit Losses

, ASU

2019

05,

Financial Instruments-Credit Losses (Topic

326

): Targeted Transition Relief

, ASU

2019

10,

Financial Instruments—Credit Losses (Topic

326

)

, Derivatives and Hedging (Topic

815

), and Leases (Topic

842

): Effective Dates and ASU

2019

11,

Codification Improvements to Topic

326,

Financial Instruments—Credit Losses

. ASU

2016

13,

as amended, affects trade receivables, financial assets and certain other instruments that are

not

measured at fair value through net income. This ASU will replace the currently required incurred loss approach with an expected loss model for instruments measured at amortized cost and is effective for financial statements issued for fiscal years beginning after

December 15, 2019,

including interim periods within those fiscal years. We do

not

expect the adoption of this guidance will have a material impact on our consolidated financial statements.

August 2018,

the FASB issued ASU

2018

14,

Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans,

which improves defined benefit disclosure requirements by removing disclosures that are

not

cost beneficial, clarifying disclosures’ specific requirements and adding relevant disclosure requirements. This ASU is effective for fiscal years ending after

December 15, 2020

and early adoption is permitted. The amendments in this ASU are required to be applied on a retrospective basis to all periods presented. We are currently assessing and have

not

yet determined the impact that the adoption of ASU

2018

will have on the disclosures to our consolidated financial statements.

August 2018,

the FASB issued ASU

2018

13,

Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement

, which improves fair value disclosure requirements by removing disclosures that are

not

cost beneficial, clarifying disclosures’ specific requirements and adding relevant disclosure requirements. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after

December 15, 2019.

The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level

fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted, and an entity can choose to early adopt any removed or modified disclosures upon issuance of this ASU and delay adoption of the additional disclosures until their effective date. We are currently assessing and have

not

yet determined the impact that the adoption of ASU

2018

will have on our consolidated financial statements.

December 2019,

the FASB issued ASU

No.

2019

12,

Simplifying the Accounting for Income Taxes

, which simplifies the accounting for income taxes, eliminates certain exceptions within ASC

740,

Income Taxes

, and clarifies certain aspects of the current guidance to promote consistency among reporting entities. ASU

2019

is effective for fiscal years beginning after

December 15, 2020.

Most amendments within the standard are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. We are currently assessing and have

not

yet determined the impact that the adoption of ASU

2019

will have on our consolidated financial statements.