1.	Summary of Significant Accounting Policies

Basis of Presentation

Our fiscal years are based on a

- or

-week period ending on the last Saturday in

December.

The condensed consolidated balance sheet at

December 28, 2019,

has been derived from our audited financial statements at that date. The interim condensed consolidated financial statements as of

March 28, 2020, (

also referred to as “the

first

quarter of fiscal

2020”

and “the

first

three

months of fiscal

2020”

) and

March 30, 2019, (

also referred to as “the

first

quarter of fiscal

2019”

and “the

first

three

months of fiscal

2019”

) are unaudited. However, in management’s opinion, these financial statements reflect all adjustments (consisting only of normal, recurring items) necessary to provide a fair presentation of our financial position, results of operations and cash flows for the periods presented. The

first

quarter of fiscal

2020

and

2019

were both comprised of

weeks.

Our interim results are

not

necessarily indicative of the results that should be expected for the full year. For a better understanding of Cohu, Inc. and our financial statements, we recommend reading these interim condensed consolidated financial statements in conjunction with our audited financial statements for the year ended

December 28, 2019,

which are included in our

2019

Annual Report on Form

-K, filed with the U. S. Securities and Exchange Commission (“SEC”). In the following notes to our interim condensed consolidated financial statements, Cohu, Inc. is referred to as “Cohu”, “we”, “our” and “us”.

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

longer had a controlling interest in ALBS and

longer consolidate ALBS as of that date.

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

Reclassifications

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had

effect on our reported results of operations, stockholder’s equity or cash flows.

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.

We adopted Accounting Standards Update (“ASU”)

2016

, Financial Instruments-Credit Losses (Topic

326

): Measurement of Credit Losses on Financial Instruments

, on

December 29, 2019,

the

first

day of our fiscal

2020.

The ASU required a cumulative-effect adjustment to the statement of financial position as of the date of adoption. Periods prior to the adoption that are presented for comparative purposes are

not

adjusted. Based on our analysis of historical and anticipated collections of trade receivables the impact of adoption of Topic

326

was insignificant. Our trade accounts receivable are presented net of allowance for credit losses, which were insignificant at

March 28, 2020

and

December 28, 2019.

Our customers include semiconductor manufacturers and semiconductor test subcontractors and other customers located throughout the world. While we believe that our allowance for credit losses is adequate and represents our best estimate at

March 28, 2020,

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 net realizable 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 net realizable values are below our costs.

Inventories by category were as follows (

in thousands

	March 28,		December 28,
	2020		2019
Raw materials and purchased parts	$	73,222	$	69,665
Work in process		44,381		46,591
Finished goods		17,256		14,450
Total inventories	$	134,859	$	130,706

Assets Held for Sale

As part of our previously announced strategic restructuring program we are implementing certain facility consolidation actions. We expect to complete the sales of our facilities located in Penang, Malaysia in the

second

quarter of

2020

and Rosenheim, Germany in the

third

quarter of

2020.

As a result, these facilities are being presented as held for sale at

March 28, 2020.

See Note

“Restructuring Charges” for additional information on this program.

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 and

three

ten

years for machinery, equipment and software. Land is

not

depreciated.

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

(in thousands)

	March 28,			December 28,
	2020			2019
Land and land improvements	$	8,650		$	11,659
Buildings and building improvements		40,593			41,474
Machinery and equipment		59,029			61,006
		108,272			114,139
Less accumulated depreciation and amortization		(43,584	)		(43,227	)
Property, plant and equipment, net	$	64,688		$	70,912

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. We have determined that our

four

identified operating segments are: Test Handler Group (THG), Semiconductor Test 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 and Indefinite-Lived Intangibles, Other Intangible Assets and

Long-lived Assets

We evaluate goodwill and other indefinite-lived intangible assets, which are solely comprised of in-process research and development (“IPR&D”), 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

first

comparing the book value of net assets to the fair value of the reporting unit or asset, in the case of in-process research and development. If the fair value is determined to be less than the book value, a

second

step is performed to compute the amount of impairment as the difference between the fair value of the reporting unit and its carrying value,

not

to exceed the carrying value 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. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors.

We conduct our annual impairment test as of

October

1st

of each year and have determined there was

impairment as of

October

2019,

as the estimated fair values of our reporting units and indefinite-lived intangible assets 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. While a decline in stock price and market capitalization is

not

specifically cited as an impairment indicator, a company’s stock price and market capitalization should be considered in determining whether it is more likely than

not

that the fair value of a reporting unit is less than its book value. The financial and credit market volatility caused by the COVID-

pandemic directly impacts our fair value measurement through our stock price that we use to determine our market capitalization. During times of volatility, significant judgment must be applied to determine whether stock price changes are a short-term swing or a longer-term trend.

During the

first

quarter of

2020,

the volatility in Cohu’s stock price, the global economic downturn and business interruptions associated with the COVID-

pandemic led us to determine that there was a triggering event related to goodwill within all of our identified reporting units and our indefinite-lived intangible assets. We performed an interim assessment as of

March 28, 2020

and determined that the fair values of our identified reporting units all exceeded their carrying values and we have concluded there were

impairment of goodwill within our reporting units. Anticipated delays in customer adoption of certain new products under development as a result of the COVID-

pandemic, changes to future project roadmap and an increase in the discount rate used in the developing our interim fair value estimate resulted in a

$3.9

million impairment to IPR&D as the carrying value exceeded fair value.

The forecasts utilized in the interim impairment test were based on known facts and circumstances. We evaluate and consider recent events and uncertain items, as well as related potential implications, as part of our annual and interim assessments and incorporate them into the analyses as appropriate. These facts and circumstances are subject to change and

may

not

be the same as future analyses. In a future period, should we again determine that an interim goodwill and indefinite-lived intangible asset impairment review is required we

may

be required to book additional impairment charges which could have a significant 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. We evaluated the expected undiscounted cashflows of these assets as of

March 28, 2020

and determined there was

impairment.

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.

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 that were 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

$0.3

million for both the

three

months ended

March 28, 2020

and

March 30, 2019.

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. 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. During the

three

months ended

March 28, 2020,

we recognized foreign exchange losses of

$0.4

million, in our consolidated statements of operations. During the

three

months ended

March 30, 2019,

we recognized foreign exchange gains of

$0.2

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.

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.

Reported share-based compensation is classified, in the condensed consolidated interim financial statements, as follows

(in thousands)

	Three Months Ended
	March 28,			March 30,
	2020			2019
Cost of sales	$	212		$	125
Research and development		833			638
Selling, general and administrative		2,566			2,930
Total share-based compensation		3,611			3,693
Income tax benefit		(172	)		(280	)
Total share-based compensation, net	$	3,439		$	3,413

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 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

three

months ended

March 28, 2020,

stock options and awards to issue approximately

58,000

shares of common stock were excluded from the computation. For the

three

months ended

March 30, 2019,

stock options and awards to issue approximately

393,000

shares of 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)

	Three Months Ended
	March 28,		March 30,
	2020		2019
Weighted average common shares		41,502		40,872
Effect of dilutive securities		-		-
		41,502		40,872

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.

Leases

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. 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 difference between the additional lease assets and lease liabilities, net of the deferred tax impact, was recorded as an adjustment to retained earnings.

We determine if a contract contains a lease at inception. Operating leases are included in operating lease right of use (“ROU”) assets, current other accrued liabilities, and long-term lease liabilities on our condensed consolidated balance sheets. Finance leases are included in property, plant and equipment, other current accrued liabilities, and long-term lease liabilities on our condensed consolidated balance sheets.

Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the adoption date or the commencement date for leases entered into after the adoption date. As most of our leases do

not

provide an implicit rate, we use our incremental borrowing rates for the remaining lease terms based on the information available at the adoption date or commencement date in determining the present value of future payments.

The operating lease ROU asset also includes any lease payments made, lease incentives, favorable and unfavorable lease terms recognized in business acquisitions and excludes initial direct costs incurred and variable lease payments. Variable lease payments include estimated payments that are subject to reconciliations throughout the lease term, increases or decreases in the contractual rent payments as a result of changes in indices or interest rates and tax payments that are based on prevailing rates. Our lease terms

may

include renewal options to extend the lease when it is reasonably certain that we will exercise those options. In addition, we include purchase option amounts in our calculations when it is reasonably certain that we will exercise those options. Rent expense for minimum payments under operating leases is recognized on a straight-line basis over the term.

Leases with an initial term of

months or less are

not

recorded on the balance sheet but recognized in our condensed consolidated statements of operations on a straight-line basis over the lease term. We account for lease and non-lease components as a single lease component and include both in our calculation of the ROU assets and lease liabilities.

We sublease certain leased assets to

third

parties, mainly as a result of unused space in our facilities.

None

of our subleases contain extension options. Variable lease payments in our subleases include tax payments that are based on prevailing rates. We account for lease and non-lease components as a single lease component.

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 relative standalone selling price 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

March 28, 2020,

we have

$9.6

million of revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) for contracts with original expected durations of over

one

year. As allowed under ASC

606,

we have opted to

not

disclose unsatisfied performance obligations for contracts with original expected durations of less than

one

year.

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. Such consideration primarily includes sales made to certain customers with cumulative tier volume discounts offered. 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 customer. 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 our condensed 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 condensed consolidated balance sheet representing the difference between the receivable recorded and the inventory shipped. At

March 28, 2020,

we had deferred revenue totaling approximately

$18.0

million, current deferred profit of

$9.3

million and deferred profit expected to be recognized after

one

year included in noncurrent other accrued liabilities of

$7.1

million. 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.

Net sales of our reportable segments, by type, are as follows

(in thousands):

	Three Months Ended
Disaggregated Net Sales	March 28, 2020		March 30, 2019
Systems:
Semiconductor Test & Inspection	$	70,539	$	79,940
PCB Test		6,840		6,972
Non-systems:
Semiconductor Test & Inspection		57,474		56,753
PCB Test		4,068		4,144
Total net sales	$	138,921	$	147,809

Revenue by geographic area based upon product shipment destination

(

in thousands

	Three Months Ended
Disaggregated Net Sales	March 28, 2020		March 30, 2019
China	$	30,811	$	23,551
United States		19,078		17,101
Malaysia		15,174		17,714
Taiwan		13,881		14,970
Philippines		10,022		14,541
Rest of the World		49,955		59,932
Total net sales	$	138,921	$	147,809

A small number of customers historically have been responsible for a significant portion of our net sales. Significant customer concentration information, by reportable segment, is as follows:

	Three Months Ended
	March 28,			March 30,
	2020			2019
Semiconductor Test & Inspection
Customers individually accounting for more than 10% of net sales		two			one
Percentage of net sales		26	%		11	%
PCB Test
Customers individually accounting for more than 10% of net sales		*			*
Percentage of net sales		*			*

single customer represented more than

10%

of consolidated net sales.

Accumulated Other Comprehensive Loss

Our accumulated other comprehensive loss balance totaled approximately

$35.0

million and

$34.0

million at

March 28, 2020

and

December 28, 2019,

respectively, and was attributed to all non-owner changes in stockholders’ equity and consists of, on an after-tax basis where applicable, foreign currency adjustments resulting from the translation of certain of our subsidiary accounts where the functional currency is

not

the U.S. Dollar and adjustments related to postretirement benefits. Reclassification adjustments from accumulated other comprehensive loss during the

first

three

months of fiscal

2020

and

2019

were

not

significant.

Retiree Medical Benefits

We provide post-retirement health benefits to certain retired executives,

one

director (who is a former executive) and their eligible dependents under a noncontributory plan. These benefits are

longer offered to any other retired Cohu employees. The net periodic benefit cost incurred during the

first

three

months of fiscal

2020

and

2019

was

not

significant.

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

10,

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

Recently Adopted Accounting Pronouncements

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. The adoption of ASU

2016

did

not

have a material impact on our condensed 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. The adoption of ASU

2018

did

not

have a material impact on our disclosures.

December 2019,

the FASB issued ASU

No.

2019

12,

Simplifying the Accounting for Income Taxes

, which simplifies the accounting for income taxes by eliminating certain exceptions for investments, intraperiod allocations and interim calculations. The new guidance also simplifies aspects of the accounting for franchise taxes, enacted changes in tax laws or rates, and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The amendments did

not

create new accounting requirements. We adopted the standard as of

December 29, 2019.

The adoption of this standard did

not

have a significant impact on our consolidated financial statements.

Recently Issued Accounting Pronouncements

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.

All other newly issued accounting pronouncements

not

yet effective have been deemed either immaterial or

not

applicable.