Adoption of New Accounting Standards

In February 2016, the FASB issued Accounting Standards Update

2016-02

–

Leases

(“ASU

2016-02”),

amended by ASU

2018-11,

Leases

(Topic 842):

Targeted Improvements

. ASU

2016-02

requires a company to recognize a

right-of-use

asset and lease liability for the obligation to make lease payments measured as the present value of the lease payments for all leases with terms greater than twelve months. The ASU requires adoption using a modified retrospective transition approach with either (1) periods prior to the adoption date being recast or (2) a cumulative-effect adjustment recognized to the opening balance of retained earnings on the adoption date with prior periods not recast. The Company adopted this standard on December 30, 2018 using the cumulative-effect adjustment approach. No cumulative-effect adjustment was recognized as the amount was not material. The Company recognized $2,929,000 as of June 29, 2019 in

right-of-use

assets and corresponding lease obligations as the result of the adoption of ASU

2016-02.

See Note 9 for additional information regarding the impact of adopting ASU

2016-02

to Landstar’s consolidated financial statements.

Accounting Standards Issued But Not Yet Adopted

In June 2016, the FASB issued Accounting Standards Update

2016-13–

Financial Instruments –

Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments

(“ASU

2016-13”),

which requires measurement and recognition of expected versus incurred credit losses for financial assets held. ASU

2016-13

is effective for annual periods beginning after December 15, 2019, and interim periods therein. The Company is currently evaluating the impact of ASU

2016-13

on its financial statements.