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 that 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

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 adopted ASU

2014

during the

first

quarter of

2018.

Management evaluated the provisions of this update and has determined that its adoption did

not

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

January 2016,

the FASB issued ASU

2016

01,

Financial Instruments

Overall

(Subtopic

825

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.

As a result of adopting this guidance effective

January 1, 2018,

the Company recorded a cumulative-effect adjustment to reclassify the

$458,000

accumulated other comprehensive loss balance to retained earnings, which balance was the result of unrealized losses on marketable securities. Effective,

January 1, 2018

unrealized gains and losses on marketable securities are recorded on the statement of income.

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.

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 were effective for annual reporting periods beginning after

December 15, 2016

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

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.

June 2016,

the FASB issued ASU

2016

Financial Instruments- Credit Losses

(Topic

326

Measurement of Credit Losses on Financial Instruments.

ASU

2016

requires an organization to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. ASU

2016

is effective for public entities for the annual periods, including interim periods within those annual periods, beginning after

December 15, 2019.

This guidance is applicable to the Company’s fiscal year beginning

January 1, 2020.

Management is currently evaluating the requirements of this guidance and has

not

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

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

not

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