Note 3 - Recent Accounting Pronouncements

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

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

3

.

Recent Accounting Pronouncements

In January 2016, the FASB issued ASU 2016-01, “

Financial Instruments

Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities

.” This update requires an entity to measure equity investments with readily determinable fair values at fair value with changes in fair value recognized in net income. Equity investment without readily determinable fair values will be measured at fair value either upon the occurrence of an observable price change or upon identification of an impairment and any amount by which the carrying value exceeding the fair value will be recognized as an impairment in net income. This update also requires an entity to disclose fair value of financial instruments measured at amortized cost on the balance sheet to measure that fair value using the exit price option. In addition, this update requires separate presentation in comprehensive income for changes in the fair value of a liability and in the balance sheet by measurement category and form of financial asset. ASU 2016-01 becomes

effective for interim and annual periods beginning after December 15, 2017.  Adoption of ASU 2016-01 is not expected to have a significant impact on the Company’s consolidated financial statements.

In March 2016, the FASB issued ASU 2016-06, “

Derivatives and Hedging

(

T

opic 8

15

):

Contingent Put and Call Options in Debt Instruments

.” This update requires an entity to perform a four-step decision sequence when assessing whether contingent call or put options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts. The four-step decision sequence is: the payoff is adjusted based on changes in an index; the payoff is indexed to an underlying other than interest rates or credit risk; the debt involves a substantial premium or discount; and the call or put option is contingently exercisable. ASU 2016-06 becomes

effective for interim and annual periods beginning after December 15, 2016.  Adoption of ASU 2016-06 is not expected to have a significant impact on the Company’s consolidated financial statements.

In March 2016, the FASB issued ASU 2016-07, “

Investments Equity Method and Joint Ventures

(

T

opic

323

):

Simplifying the Transition to the Equity Method of Accounting

.” This update eliminates the requirement to retroactively adopt the equity method of accounting. It requires that an equity method investor add the cost of acquiring the additional interest to the current basis of the previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. The retroactive adjustment of the investment is no longer required. ASU 2016-07 becomes

effective for interim and annual periods beginning after December 15, 2016.  Adoption of ASU 2016-07 is not expected to have a significant impact on the Company’s consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, “

Compensation Stock Compensation

(

T

opic

718

):

I

m

provements to Employee Share-Based Payment Accounting

.” This update simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 becomes

effective for interim and annual periods beginning after December 15, 2016.  Adoption of ASU 2016-09 is not expected to have a significant impact on the Company’s consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, “

Financial Instruments - Credit Losses

(

T

opic

326

):

Measurement of Credit Losses on Financial Instruments.”

This update requires an entity to use a broader range of reasonable and supportable forecasts, in addition to historical experience and current conditions, to develop an expected credit loss estimate for financial assets and net investments that are not accounted for at fair value through net income. Credit losses relating to available-for-sale debt securities should be recorded through an allowance for credit losses to the amount by which fair value is below amortized cost. ASU 2016-13 becomes

effective for interim and annual periods beginning after December 15, 2019.  The Company is currently evaluating the impact on the Company’s consolidated financial statements.