New Accounting Standards

12 Months Ended

Dec. 31, 2015

New Accounting Standards [Abstract]

New Accounting Standards

New Accounting Standards

In May 2014, the FASB issued FASB ASU 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which will replace all existing revenue recognition guidance under U.S. GAAP. On July 9, 2015, the FASB approved a one year deferral of the effective date of ASU 2014-09 all annual and interim periods beginning after December 15, 2017, with early application permitted only for annual and interim periods beginning after December 31, 2016. ASU 2014-09 provides for one of two methods of transition: retrospective application to each prior period presented; or, recognition of the cumulative effect of retrospective application of the new standard as of the beginning of the period of initial application. Presently, we are not yet in a position to conclude on the application date or the transition method we will choose. Based on our initial assessment, the impact of the application of the new standard will likely result in a change in the timing of our revenue recognition for performance incentives received from clients and the recognition of certain reimbursable out-of-pocket costs as revenue. Performance incentives are currently recognized in revenue when specific quantitative goals are achieved, or when our performance against qualitative goals is determined by the client. Under the new standard, we will be required to estimate the amount of the incentive that will be earned at the inception of the contract and recognize the incentive over the term of the contract. While performance incentives are not material to our revenue, this will result in an acceleration in revenue recognition for certain contract incentives compared to the current method. Certain incidental costs that are reimbursed by our clients and are currently required to be recorded in revenue will likely not be recorded as revenue under the new standard. We expect this will result in less revenue and related cost recorded in our results of operations. While, we have not yet completed our assessment, we do not expect this change to have a material impact to our revenue and it will not result in any change to operating income.

In February 2015, the FASB issued FASB ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis (“ASU 2015-02”), which changes the consolidation analysis for both the variable interest model and for the voting model for limited partnerships and similar entities. ASU 2015-02 is effective for annual and interim periods beginning after December 15, 2015 and early application is permitted. ASU 2015-02 provides for one of two methods of transition: retrospective application to each prior period presented; or, recognition of the cumulative effect of retrospective application of the new standard in the period of initial application. We applied ASU 2015-02 on January 1, 2016 and the application of the new standard did not have a significant impact on our results of operations or financial position.

In January 2016, the FASB issued FASB ASU 2016-01, Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Liabilities (“ASU 2016-01”), which will require equity investments, except equity method investments, to be measured at fair value and any changes in fair value will be recognized in results of operations. ASU 2016-01 is effective for annual and interim periods beginning after December 15, 2017 and early application is not permitted. ASU 2016-01 provides for the recognition of the cumulative effect of retrospective application of the new standard in the period of initial application. We will apply ASU 2016-01 on January 1, 2018 and we expect that the application of the new standard will not have a significant impact on our results of operations or financial position.