Note 13 - New Accounting Standards

6 Months Ended

Jul. 02, 2016

Notes to Financial Statements

New Accounting Pronouncements and Changes in Accounting Principles [Text Block]

13. New Accounting Standards

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers”, to clarify the principles used to recognize revenue for all entities. In March 2016, the FASB issued ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations,” which further clarifies the implementation guidance on principal versus agent considerations”, and in April 2016, the FASB issued ASU 2016-10, “Revenue from contracts with customers (Topic 606): Identifying performance obligations and licensing”, an update on identifying performance obligations and accounting for licenses of intellectual property. Additionally, in May 2016, the FASB issued ASU 2016-12, “Revenue from contracts with customers (Topic 606): Narrow-scope improvements and practical expedients,” which includes amendments for enhanced clarification of the guidance. This guidance is effective for fiscal years beginning on or after December 15, 2017 including interim periods within those fiscal years and early adoption is permitted. We are evaluating the impact that adoption of this guidance will have on our consolidated financial statements.

In April 2015, the FASB issued ASU No. 2015-05(ASU 2015-05),

I

n

t

ang

i

b

l

e

s

—

G

ood

wil

l

an

d

O

t

h

e

r

—

I

n

t

e

r

na

l

-U

se

So

ftw

a

re

(

Sub

t

op

i

c

350

-

40

)

:

C

u

s

t

o

m

e

r

’

s

A

cc

oun

ti

n

g

f

o

r

F

ee

s

P

a

i

d

i

n

a

Cl

ou

d

C

o

m

pu

ti

n

g

A

rr

ang

e

m

e

n

t

. This standard clarifies the circumstances under which a cloud computing customer would account for the arrangement as a license of internal-use software under ASC 350-40. ASU 2015-05 is effective for public entities for annual and interim periods therein beginning after December 15, 2015. Early adoption is permitted. Entities may adopt the guidance either retrospectively or prospectively to arrangements entered into, or materially modified after the effective date. The Company has adopted ASU 2015-05. The Company has adopted ASU 2015-05 prospectively and there was no impact to the consolidated financial statements.

In November 2015, The FASB issued ASU No. 2015-17, Income Taxes (Topic 740):

Balance Sheet Classification of Deferred Taxes.

The new guidance requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet. As a result, each jurisdiction will now only have one net noncurrent deferred tax asset or liability. Importantly, the guidance does not change the existing requirement that only permits offsetting within a jurisdiction – that is, companies are still prohibited from offsetting deferred tax liabilities from one jurisdiction against deferred tax assets of another jurisdiction. The new guidance will be effective for the Company in the fiscal year beginning after December 15, 2016, including interim periods within those years (i.e., in the first quarter of 2017). Early adoption is permitted for all entities as of the beginning of an interim or annual reporting period. The guidance may be applied either prospectively, for all deferred tax assets and liabilities, or retrospectively (i.e., by reclassifying the comparative balance sheet). If applied prospectively, entities are required to include a statement that prior periods were not retrospectively adjusted. If applied retrospectively, entities are also required to include quantitative information about the effects of the change on prior periods. The Company adopted ASU No. 2015-17 during the period ended July 2, 2016. The Company chose not to apply the ASU retrospectively, and as such prior periods were not retrospectively adjusted.

In February 2016 the FASB issued ASU No. 2016-02

, Leases (Topic 842),

which amended guidance for lease arrangements in order to increase transparency and comparability by providing additional information to users of financial statements regarding an entity's leasing activities. The revised guidance seeks to achieve this objective by requiring reporting entities to recognize lease assets and lease liabilities on the balance sheet for substantially all lease arrangements. The guidance, which is required to be adopted in the first quarter of 2019, will be applied on a modified retrospective basis beginning with the earliest period presented. Early adoption is permitted. We are currently evaluating the impact of adopting this guidance on our consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-09

, Compensation-Stock Compensation (Topic 718):

Improvements to Employee Share-Based Payment Accounting

,

to simplify the accounting for stock compensation, including income tax accounting, award classification, estimating forfeitures and cash flow presentation. The new guidance is effective for interim and annual reporting periods beginning after December 15, 2016, and early adopting is permitted. The Company is currently assessing the impact of ASU 2016-09 on its consolidated financial statements.