Note

May

2014

and in subsequent updates, the FASB issued guidance on revenue recognition which requires that we recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration which we expect to be entitled in exchange for those goods or services. We have performed a review of the requirements of the new revenue standard and are in the process of reviewing customer contracts and applying the

five

-step model of this new guidance to each contract category we have identified and will compare the results to our current accounting practices.

Our analysis to date has focused on the identification of the contracts in place, including the related accounting policies and practices to identify potential differences that would result from applying the requirements under the new standard. Based on the assessment to date, we do

not

expect the adoption of the new revenue recognition standard to have a material impact on our financial statements.

We plan to adopt this guidance on the

first

day of our fiscal

2019

year. We will likely apply the modified retrospective transition method, which would result in an adjustment to retained earnings for the cumulative effect, if any, of applying the standard to contracts in process as of the adoption date. Under this method, we would

not

restate the prior financial statements presented. Therefore, this guidance would require additional disclosures of the amount by which each financial statement line item is affected in the fiscal year

2019

reporting period.

January 2016,

the FASB issued guidance which requires an entity to measure equity investments at fair value with changes in fair value recognized in net income, to use the price that would be received by a seller when measuring the fair value of financial instruments for disclosure purposes, and which eliminates the requirement to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. Under present guidance, changes in fair value of equity investments are recognized in Stockholder’s Equity. This guidance is effective for our fiscal year ended

September 2019.

Early adoption is

not

permitted. We do

not

anticipate that the adoption of this new guidance will have a material impact on our consolidated financial statements.

February 2016,

the FASB issued guidance on lease accounting which requires that an entity recognize most leases on its balance sheet. The guidance retains a dual lease accounting model for purposes of income statement recognition, continuing the distinction between what are currently known as “capital” and “operating” leases for lessees. This guidance is effective for our fiscal year ended

September 2020.

We anticipate that the impact of this guidance on our financial statements will be material

January 2017,

the FASB issued guidance to clarify the definition of a business. The updated standard provides guidance to assist entities with evaluating when a set of transferred assets and activities is a business. Under the new guidance, an entity

first

determines whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If this threshold is met, the set is

not

a business. If it is

not

met, the entity then evaluates whether the set meets the requirements that a business include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs. The updated guidance is effective for our fiscal year ending

September 2019

and interim periods within that year. Early adoption is permitted, including for interim and annual periods in which the financial statements have

not

been issued or made available for issuances. We have adopted this new guidance in the

March 2017

quarter and the adoption had

impact on our consolidated financial statements.

January 2017,

the FASB issued guidance to simplify the test for goodwill impairment. This updated standard simplifies the subsequent measurement of goodwill and eliminates the

two

-step goodwill impairment test. Under the new guidance, an annual or interim goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount, and an impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. The guidance also eliminates the requirements for any reporting unit with a

zero

or negative carrying amount to perform a qualitative assessment and

two

-step goodwill impairment test. The updated guidance is effective for our fiscal year ending

September 2021

and interim periods within that year. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after

January 1, 2017.

We do

not

anticipate that the adoption of this new guidance will have a material impact on our consolidated financial statements.