Note 5 - Recent Accounting Pronouncements

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

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

5. Recent Accounting Pronouncements

Accounting Standards Update (“ASU”)

2014

-

09,

Revenue from Contracts with Customers

(Topic

606

) (“ASU

2014

-

09”

) is a comprehensive new revenue recognition model requiring a company to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. In adopting ASU

2014

-

09,

companies

may

use either a full retrospective or a modified retrospective approach. ASU

2014

-

09

is effective for the

first

interim period within an annual reporting period beginning after

December 15, 2017,

and early adoption is

not

permitted. The Company will adopt ASU

2014

-

09

during the

first

quarter of

2018.

Management is evaluating the provisions of this update and at this point in time has determined that its adoption will have limited to

no

impact on the Company’s financial position or results of operations.

In

November 2015,

the FASB issued ASU

2015

-

17,

Income Taxes

(Topic

740

):

Balance Sheet Classification of Deferred Taxes

, which requires deferred income tax liabilities and assets to be classified as noncurrent on the balance sheet rather than being separated into current and noncurrent. The guidance is effective for public entities for annual periods beginning after

December 15, 2016

and interim periods within those annual periods, with early adoption being permitted. The Company has adopted this guidance for the period ended

June 30, 2017.

There was

$410,000

in deferred tax assets that were netted against deferred tax liabilities as of the end of the

first

quarter

2017.

Prior periods were

not

retrospectively adjusted.

In

January 2016,

the FASB issued ASU

2016

-

01,

Financial Instruments

-

Overall

(Subtopic

825

-

10

):

Recognition and Measurement of Financial Assets and Financial Liabilities

, which provides guidance for the recognition, measurement, presentation and disclosure of financial instruments. The new guidance revises the accounting requirements related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value.  The guidance also changes certain disclosure requirements associated with the fair value of financial instruments. These changes will require an entity to measure, at fair value, investments in equity securities and other ownership interests in an entity and recognize the changes in fair value within net income. The guidance is effective for fiscal years and interim periods within those years beginning after

December 15, 2017.

The Company has

not

yet adopted this guidance and has

not

yet determined the impact of adoption on the Company’s financial position or results of operations.

In

February 2016,

the FASB issued ASU

2016

-

02,

Leases

(Topic

842

), which requires lessees to recognize most leases on the balance sheet. The provisions of this guidance are effective for annual periods beginning after

December 15, 2018

and interim periods within those years, with early adoption permitted. Management is evaluating the requirements of this guidance and has

not

yet determined the impact of the adoption on the Company’s financial position or results of operations.

In

March 2016,

the FASB issued ASU

2016

-

09,

Compensation

-

Stock Compensation

(Topic

718

):

Improvements to Employee Share-Based Payment Accounting

, which simplifies several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. The provisions of this guidance are effective for annual reporting periods beginning after

December 15, 2016

and interim periods within those annual periods, with early adoption permitted. T

he Company adopted this guidance during the quarter ended

March 31, 2017,

and the Company recorded a

one

-time

$

866,000

cumulative-effect adjustment to reduce additional paid-in capital and increase retained earnings for excess tax benefits from stock option exercises that had previously been recorded to additional paid-in capital. The adoption of this guidance also increased the number of dilutive shares because excess tax benefits are

no

longer included in the assumed proceeds when calculating the number of dilutive shares. In addition, the effective tax rate will be reduced in future periods when there are excess tax benefits from stock options exercised.

Management periodically reviews new accounting standards that are issued. Management has

not

identified any other new standards that it believes merit further discussion.