)

Recently Issued Accounting Pronouncements

Accounting Pronouncements

Not

Yet Adopted

Revenue from Contracts with Customers

(Topic

606

)

May 2014,

the Financial Accounting Standards Board (“FASB”) issued ASU

No.

2014

09,

“Revenue from Contracts with Customers (Topic

606

)” which supersedes the guidance in “Revenue Recognition (Topic

605

).” The core principle of ASU

2014

requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU

2014

is effective for annual reporting periods beginning after

December 15, 2017,

including interim periods within that reporting period, and is to be applied retrospectively, with early application

not

permitted.

The Company has evaluated the new standard and applied the core principle to its contract revenue streams. To be consistent with this core principle, an entity is required to apply the following

five

-step approach:

Identify the contract(s) with a customer;

Identify each performance obligation in the contract;

Determine the transaction price;

Allocate the transaction price to each performance obligation; and

Recognize revenue when or as each performance obligation is satisfied.

The Company’s revenues primarily result from contracts with customers. The agricultural products and tools segments are generally short-term contracts and contain a single performance obligation – the delivery of product to the common carrier. The Company recognizes revenue for the sale of agriculture parts, equipment and tools upon shipment of the good. The modular buildings segment executes contracts with customers that can be short or long-term in nature. These contracts can have multiple performance obligations and revenue from these can be recognized over time or at a point in time depending on the nature of the contracts. Payment terms generally are short-term and vary by customer and segment. The implementation process will include modifications to the contracts of the modular buildings segment.

The Company intends to adopt ASU

2014

using the modified retrospective method. Once adopted, the Company has determined that amounts reported under ASC

606

will

not

be materially different than amounts that would have been reported under the previous revenue guidance of ASC

605

and would

not

require an adjustment to retained earnings.

The Company, upon adoption of ASU

2014

09,

will increase the amount of required disclosures, including but

not

limited to:

●

Disaggregation of revenue that depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors;

●

The opening and closing balances of receivables, contract assets, and contract liabilities from contracts with customers, if

not

otherwise separately presented or disclosed;

●

Revenue recognized in the reporting period that was included in the contract liability balance at the beginning of the period;

●

Information about performance obligations in contracts with customers; and

●

Judgments that significantly affect the determination of the amount and timing of revenue from contracts with customers, including the timing satisfaction of performance obligation, and the transaction price and the amounts allocated to performance obligations.

Leases

February 2016,

the FASB issued ASU

2016

02,

“Leases (Topic

842

),” which requires a lessee to recognize a right-of-use asset and a lease liability on its balance sheet for all leases with terms of

twelve

months or greater. This guidance is effective for fiscal years beginning after

December 15, 2018,

including interim periods within those years. The Company will adopt this guidance for its fiscal year ending

November 30, 2020,

including interim periods within that reporting period. The Company has a moderate amount of leasing activity and is currently evaluating the impact of this guidance on its consolidated financial statements.