Note 5 - Recent Accounting Pronouncements

6 Months Ended

Jun. 30, 2020

Notes to Financial Statements

Accounting Standards Update and Change in Accounting Principle [Text Block]

5. Recent Accounting Pronouncements

In

February 2016,

the FASB issued ASU

2016

-

02,

Leases, which introduces the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous guidance. The update is effective for annual reporting periods beginning after

December 15, 2018,

including interim periods within those reporting periods, with early adoption permitted. The original guidance required application on a modified retrospective basis with the earliest period presented. In

August 2018,

the FASB issued ASU

2018

-

11,

Targeted Improvements to ASC

842,

which includes an option to

not

restate comparative periods in transition and elect to use the effective date of ASC

842,

Leases, as the date of initial application of transition. Based on the effective date, we adopted this ASU beginning on

January 1, 2019

and elected the transition option provided under ASU

2018

-

11.

This standard had a material effect on our consolidated balance sheet with the recognition of new right-of-use assets and lease liabilities for all operating leases, as these leases typically have a non-cancelable lease term of greater than

one

year. Upon adoption, both assets and liabilities on our consolidated balance sheet increased by approximately

$3,455,000.

We have elected a package of transition practical expedients, which include

not

reassessing whether any expired or existing contracts are or contain leases,

not

reassessing the lease classification of expired or existing leases, and

not

reassessing initial direct costs for existing leases. We have also elected a practical expedient to

not

separate lease and non-lease components. We did

not

elect the practical expedient to use hindsight in determining the lease terms or assessing impairment of the ROU assets. See also Note

13

of these Notes to Condensed Consolidated Financial Statements (Unaudited) for more information.

In

June 2016,

the FASB issued ASU

2016

-

13

Financial Instruments - Credit Losses (Topic

326

): Measurement of Credit Losses on Financial Instruments. ASU

2016

-

13

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

-

13

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.

Adoption of the new standard did

not

have a material impact on our consolidated financial statements.

In

June 2018,

the FASB issued ASU

2018

-

07,

Compensation - Stock Compensation (Topic

718

), Improvements to Nonemployee Share-Based Payment Accounting. This ASU is intended to simplify aspects of share-based compensation issued to non-employees by making the guidance consistent with accounting for employee share-based compensation. ASU

2018

-

07

is effective for annual periods beginning after

December 15, 2018

and interim periods within those annual periods, with early adoptions permitted but

no

earlier than an entity's adoption date of ASC Topic

606.

The new guidance is required to be applied retrospectively with the cumulative effect recognized at the date of initial application. We adopted the provisions of this ASU in the

first

quarter of

2019.

Adoption of the new standard did

not

have a material impact on our consolidated financial statements.

In

December 2019,

the FASB issued ASU

No.

2019

-

12,

“Income Taxes (Topic

740

): Simplifying the Accounting for Income Taxes (“ASU

2019

-

12”

), which is intended to simplify various aspects related to accounting for income taxes. ASU

2019

-

12

removes certain exceptions to the general principles in Topic

740

and also clarifies and amends existing guidance to improve consistent application. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after

December 15, 2020,

with early adoption permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.

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.