Note 2 - Recent Accounting Pronouncements

6 Months Ended

Mar. 28, 2020

Notes to Financial Statements

Accounting Standards Update and Change in Accounting Principle [Text Block]

(

2

) Recent Accounting Pronouncements

Current Adoptions

In

February 2016,

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

No.

2016

-

02

“Leases (Topic

842

),” which requires lessees to recognize a right-of-use asset and a lease liability on the balance sheet for leases with terms greater than

twelve

months. We adopted the new lease standard in the

first

quarter using the modified retrospective method, which allows for the recognition of a cumulative effect adjustment to the beginning balance of retained earnings in the period of adoption without adjusting the comparative periods prior to adoption. We elected the package of practical expedients permitted under the new lease standard, which among other things, allowed us to carry forward historical lease classification. We also elected the short-term lease exemption such that the new lease standard was applied to leases greater than

one

year in duration. We did

not

elect the hindsight practical expedient to determine the lease term for existing leases. The adoption of the new lease standard had a material effect on our consolidated financial statements as it resulted in a

$1.9

million increase in total assets and total liabilities on our consolidated balance sheet as of

September 29, 2019.

The new lease standard did

not

have a material impact on our consolidated earnings or cash flows.

In

May 2017,

the FASB issued ASU

No.

2017

-

09

“Compensation – Stock Compensation (Topic

718

): Scope of Modification Accounting.” ASU

No.

2017

-

09

was issued to clarify and reduce both (i) diversity in practice and (ii) cost and complexity when applying its guidance to changes in the terms and conditions of a share-based payment award. ASU

No.

2017

-

09

became effective for us in the

first

quarter. The adoption of this update did

not

impact our consolidated financial statements.

Future Adoptions

In

June 2016,

the FASB issued ASU

No.

2016

-

13

“Credit Losses - Measurement of Credit Losses on Financial Instruments.” ASU

No.

2016

-

13

significantly changes how entities will measure credit losses for most financial assets, including accounts and notes receivables, by replacing today’s “incurred loss” approach with an “expected loss” model under which allowances will be recognized based on expected rather than incurred losses. ASU

No.

2016

-

13

will become effective for us in the

first

quarter of fiscal

2021.

We are evaluating the impact that the adoption of this update will have on our consolidated financial statements.

In

January 2017,

the FASB issued ASU

No.

2017

-

04

“Intangibles – Goodwill and Other (Topic

350

): Simplifying the Test for Goodwill Impairment,” which simplifies the accounting for goodwill impairments by eliminating step

2

from the goodwill impairment test. ASU

No.

2017

-

04

will become effective for us in the

first

quarter of fiscal

2021

and early adoption is permitted. We are evaluating the impact that the adoption of this update will have on our consolidated financial statements.

In

December 2019,

the FASB issued ASU

2019

-

12

"Simplifying the Accounting for Income Taxes (Topic

740

)." ASU

No.

2019

-

12

removes certain exceptions to the general principles in Accounting Standards Codification (“ASC”)

740

and also clarifies and amends existing guidance to provide for more consistent application. ASU

2019

-

12

will become effective for us in the

first

quarter of fiscal

2021

and early adoption is permitted. We are evaluating the impact that the adoption of this update will have on our consolidated financial statements.