LEASES (Tables)
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12 Months Ended |
Sep. 30, 2020 |
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| Leases [Abstract] |
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| Effect of the Change in Accounting Policy |
The following table provides a brief description of recent accounting pronouncements and our analysis of the effects on our financial statements: | | | | | Standard | Description | Date of Adoption | Effect on the Financial Statements or Other Significant Matters | Recently Adopted Accounting Pronouncements | ASU No. 2016-02, Leases (Topic 842) and related ASUs issued subsequent | ASU No. 2016-02 requires organizations that lease assets — referred to as “lessees” — to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases with lease terms of more than 12 months. Lessor accounting remains substantially similar to current U.S. GAAP. In addition, disclosures of leasing activities are to be expanded to include qualitative along with specific quantitative information. ASU No. 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. ASU 2016-02 mandates a modified retrospective transition method of adoption with an option to use certain practical expedients. | October 1, 2019 | We adopted this ASU during the first quarter of fiscal year 2020, as required. Refer to Note 6—Leases for additional information.
| ASU No. 2018-15, Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract | This ASU aims to reduce complexity in the accounting for costs of implementing a cloud computing service arrangement. ASU No. 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). This update is effective for annual and interim periods beginning after December 15, 2019. The amendments in this update should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. Early adoption is permitted. | October 1, 2019 | We early adopted this ASU during the first quarter of fiscal year 2020 on a prospective basis. The prospective impact is not material to our consolidated financial statements and disclosures.
| Standards that are not yet adopted as of September 30, 2020 | ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326) and related ASUs issued subsequent | This ASU introduces a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. The new model will apply to: (1) loans, accounts receivable, trade receivables, and other financial assets measured at amortized cost, (2) loan commitments and certain other off-balance sheet credit exposures, (3) debt securities and other financial assets measured at fair value through other comprehensive income(loss), and (4) beneficial interests in securitized financial assets. This update is effective for annual and interim periods beginning after December 15, 2019. | October 1, 2020 | The guidance will be applied using the modified retrospective method with a cumulative effect adjustment to our beginning retained earnings balance. This update will apply primarily to receivables arising from revenue transactions. We have analyzed our historical credit losses and considered current economic conditions in developing our expected credit loss rate. We are currently finalizing our processes, internal controls and disclosures that are required upon adoption. We do not believe the implementation of this guidance will have a material impact on our consolidated financial statements and disclosures. |
| | | | | Standard | Description | Date of Adoption | Effect on the Financial Statements or Other Significant Matters | ASU No. 2019-12, Financial Instruments – Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes | This ASU simplifies the accounting for income taxes by removing certain exceptions related to Topic 740. The ASU also improves consistent application of and simplifies GAAP for other areas of Topic 740 by clarifying and amending existing guidance. This update is effective for annual and interim periods beginning after December 15, 2020. Early adoption of the amendment is permitted, including adoption in any interim period for public entities for periods for which financial statements have not yet been issued. An entity that elects to early adopt the amendments in an interim period should reflect any adjustments as of the beginning of the annual period that includes that interim period. Additionally, an entity that elects early adoption must adopt all the amendments in the same period. Upon adoption, the amendments addressed in this ASU will be applied either prospectively, retrospectively or on a modified retrospective basis through a cumulative-effect adjustment to retained earnings. | October 1, 2021 | We are currently evaluating the impact the new guidance may have on our consolidated financial statements and disclosures. | ASU No. 2018-14, Compensation – Retirement Benefits – Defined Benefit Plans—General (Topic 715-20): Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans | This ASU amends ASC 715 to add, remove, and clarify disclosure requirements related to defined benefit, pension and other postretirement plans. This update is effective for annual and interim periods ending after December 15, 2020. Upon adoption, the guidance will be applied on a retrospective basis to all periods presented. | October 1, 2021 | We are currently evaluating the impact the new guidance may have on our consolidated financial statements and disclosures. |
The change in accounting policy affected the following items in the balance sheet on October 1, 2019: | | | | | | | | | | | | | (in thousands) | September 30, 2019 | | Adjustments | | October 1, 2019 | Other Noncurrent Assets: | | | | | | Operating lease right-of-use asset | $ | — |
| | $ | 56,071 |
| | $ | 56,071 |
| Current Liabilities: | | | | | | Accrued Liabilities | — |
| | 16,277 |
| | 16,277 |
| Noncurrent Liabilities: | | | | | | Other | — |
| | 39,794 |
| | 39,794 |
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| Lease Position and Recognized Right-of-Use Assets |
Lease Position | | | | | | | | | (in thousands) | October 1, 2019 | | September 30, 2020 | Operating lease commitments, including probable extensions (1) | $ | 62,218 |
| | $ | 48,695 |
| | | | | Discounted using the lessee's incremental borrowing rate at the date of initial application | $ | 57,323 |
| | $ | 46,706 |
| (Less): short-term leases recognized on a straight-line basis as expense | (1,252 | ) | | (1,456 | ) | Lease liability recognized | $ | 56,071 |
| | $ | 45,250 |
| | | | | Of which: | | | | Current lease liabilities | $ | 16,277 |
| | $ | 11,364 |
| Non-current lease liabilities | 39,794 |
| | 33,886 |
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| | (1) | Our future minimal rental payments exclude optional extensions that have not been exercised but are probable to be exercised in the future, those probable extensions are included in the operating lease liability balance. |
The recognized right-of-use assets relate to the following types of assets: | | | | | | | | | (in thousands) | October 1, 2019 | | September 30, 2020 | Properties | $ | 52,188 |
| | $ | 42,448 |
| Equipment | 3,652 |
| | 1,394 |
| Other | 231 |
| | 741 |
| Total right-of-use assets | $ | 56,071 |
| | $ | 44,583 |
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| Certain Information Related to Lease Costs and Other Information Related to Operating Leases |
The following table presents certain information related to the lease costs for our operating leases: | | | | | (in thousands) | Year Ended
September 30, 2020 | Operating lease cost | $ | 16,953 |
| Short-term lease cost | 1,693 |
| Total lease cost | $ | 18,646 |
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Lease Terms and Discount Rates The table below presents certain information related to the weighted average remaining lease terms and weighted average discount rates for our operating leases as of September 30, 2020. | | | | | September 30, 2020 | Weighted average remaining lease term | 4.9 |
| Weighted average discount rate | 2.7 | % |
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| Future Minimum Rental Payments Required under Operating Lease |
Future minimum rental payments required under operating leases having initial or remaining non-cancelable lease terms in excess of one year at September 30, 2020 (in thousands) are as follows: | | | | | Fiscal Year | Amount | 2021 | $ | 11,680 |
| 2022 | 8,133 |
| 2023 | 7,466 |
| 2024 | 7,018 |
| 2025 | 3,231 |
| Thereafter | 638 |
| Total (1) | $ | 38,166 |
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(1) Our future minimal rental payments exclude optional extensions that have not been exercised but are probable to be exercised in the future, those probable extensions are included in the operating lease liability balance.
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