New Accounting Pronouncements Adopted

February 2016,

the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU)

No.

2016

02,

Leases

. The guidance in ASU

2016

supersedes the lease recognition requirements in the Accounting Standards Codification (ASC) Topic

840,

Leases

. ASU

2016

requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. This standard became effective for the Company on

September 1, 2019.

The FASB has subsequently issued the following amendments to ASU

2016

02,

which have the same effective date and transition date of

September 1, 2019,

and which are collectively referred to as the new leasing standards:

ASU

No.

2018

01,

Leases (Topic

842

): Land Easement Practical Expedient for Transition to Topic

842

, which permits an entity to elect an optional transition practical expedient to

not

evaluate under Topic

842

land easements that existed or expired prior to adoption of Topic

842

and that were

not

previously accounted for as leases under the prior standard, ASC

840,

Leases

ASU

No.

2018

10,

Codification Improvements to Topic

842,

Leases

, which amends certain narrow aspects of the guidance issued in ASU

2016

02.

ASU

No.

2018

11,

Leases (Topic

842

): Targeted Improvements

, which allows for a transition approach to initially apply ASU

2016

at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption as well as an additional practical expedient for lessors to

not

separate non-lease components from the associated lease component.

ASU

No.

2018

20,

Narrow-Scope Improvements for Lessors

, which contains certain narrow scope improvements to the guidance issued in ASU

2016

02.

Additional information and disclosures required by this new standard are contained in Note

12,

titled “Commitments and Contingencies.”

The Company adopted the new leasing standards on

September 1, 2019,

using a modified retrospective transition approach to be applied to leases existing as of, or entered into after,

September 1, 2019;

and, consequently, financial information will

not

be updated and the disclosures required under Topic

842

will

not

be provided for dates and periods prior to

September 1, 2019.

The Company has reviewed its existing lease contracts and the impact of the new leasing standards on its consolidated results of operations, financial position and disclosures. Upon adoption of the new leasing standards, the Company recognized a lease liability and related right-of-use asset on its consolidated balance sheet of approximately

$600,000

Recently Issued Accounting Pronouncements

February 2018,

the FASB issued ASU

No.

2018

02,

Income Statement – Reporting Comprehensive Income (Topic

220

) Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income

, which will allow a reclassification from accumulated other comprehensive income to retained earnings for the tax effects resulting from the Tax Cuts and Jobs Act (Tax Reform Act) that are stranded in accumulated other comprehensive income. This standard also requires certain disclosures about stranded tax effects. ASU

No.

2018

02,

however, does

not

change the underlying guidance that requires that the effect of a change in tax laws or rates be included in income from continuing operations. ASU

No.

2018

was adopted by the Company commencing with

first

quarter of the Company’s fiscal year

2020,

and it did

not

have any impact on its consolidated financial statements.

June 2016,

the FASB issued ASU

No.

2016

13,

Measurement of Credit Losses on Financial Instruments

, which revises guidance for the accounting for credit losses on financial instruments within its scope, and in

November 2018,

issued ASU

No.

2018

and in

April 2019,

issued ASU

No.

2019

and in

May 2019,

issued ASU

No.

2019

05,

and in

November 2019,

issued ASU

No.

2019

11,

which amended the standard. The new standard introduces an approach, based on expected losses, to estimate credit losses on certain types of financial instruments and modifies the impairment model for available-for-sale debt securities. The new approach to estimating credit losses (referred to as the current expected credit losses model) applies to most financial assets measured at amortized cost and certain other instruments, including trade and other receivables, loans, held-to-maturity debt securities, net investments in leases and off-balance-sheet credit exposures. This ASU is effective for fiscal years beginning after

December 15, 2022,

including interim periods within those fiscal years, with early adoption permitted. Entities are required to apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the

first

reporting period in which the guidance is adopted. The Company is still evaluating the impact of this ASU.

Although there are several other new accounting pronouncements issued or proposed by the FASB, which the Company has adopted or will adopt, as applicable, the Company does

not

believe any of these accounting pronouncements has had or will have a material impact on the Company’s consolidated financial position or operating results.