1.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED MATTERS

Nature of Operations

Bed Bath & Beyond Inc. and subsidiaries (the “Company”) is an omnichannel retailer selling a wide assortment of domestics merchandise and home furnishings which operates under the names Bed Bath & Beyond (“BBB”), Christmas Tree Shops, Christmas Tree Shops andThat! or andThat! (collectively, “CTS”), Harmon, Harmon Face Values or Face Values (collectively, “Harmon”), buybuy BABY (“Baby”) and World Market, Cost Plus World Market or Cost Plus (collectively, “Cost Plus World Market”). Customers can purchase products from the Company either in-store, online, with a mobile device or through a customer contact center. The Company generally has the ability to have customer purchases picked up in-store or shipped direct to the customer from the Company’s distribution facilities, stores or vendors. In addition, the Company operates Of a Kind, an e-commerce website that features specially commissioned, limited edition items from emerging fashion and home designers; One Kings Lane, an authority in home décor and design, offering a unique collection of select home goods, designer and vintage items; PersonalizationMall.com (“PMall”), an industry-leading online retailer of personalized products; Chef Central, a retailer of kitchenware, cookware and homeware items catering to cooking and baking enthusiasts; and Decorist, an online interior design platform that provides personalized home design services. The Company also operates Linen Holdings, a provider of a variety of textile products, amenities and other goods to institutional customers in the hospitality, cruise line, healthcare and other industries. Additionally, the Company is a partner in a joint venture which operates retail stores in Mexico under the name Bed Bath & Beyond.

The Company accounts for its operations as

two

operating segments: North American Retail and Institutional Sales. The Institutional Sales operating segment, which is comprised of Linen Holdings, does

not

meet the quantitative thresholds under U.S. generally accepted accounting principles and therefore is

not

a reportable segment. Net sales outside of the U.S. for the Company were

not

material for fiscal

2017,

2016,

and

2015.

The Company sells a wide assortment of domestics merchandise and home furnishings. Domestics merchandise includes categories such as bed linens and related items, bath items and kitchen textiles. Home furnishings include categories such as kitchen and tabletop items, fine tabletop, basic housewares, general home furnishings (including furniture and wall décor), consumables and certain juvenile products. Sales of domestics merchandise and home furnishings accounted for approximately

35.5%

and

64.5%

of net sales, respectively, for fiscal

2017,

36.8%

and

63.2%

of net sales, respectively, for fiscal

2016

and

35.9%

and

64.1%

of net sales, respectively, for fiscal

2015.

As the Company operates in the retail industry, its results of operations are affected by general economic conditions and consumer spending habits.

Fiscal Year

The Company’s fiscal year is comprised of the

-week period ending on the Saturday nearest

February

28th.

Accordingly, fiscal

2017

represented

weeks and ended

March 3, 2018.

Fiscal

2016

and fiscal

2015

represented

weeks and ended on

February 25, 2017

and

February 27, 2016,

respectively.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. The Company accounts for its investment in the joint venture under the equity method.

Certain reclassifications have been made to the fiscal

2016

consolidated balance sheet to conform to the fiscal

2017

consolidated balance sheet presentation, as well as to the fiscal

2016

and

2015

consolidated statements of cash flows to conform to the fiscal

2017

consolidated statement of cash flows presentation.

All significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires the Company to establish accounting policies and to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and on other assumptions that it believes to be relevant under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are

not

readily apparent from other sources. In particular, judgment is used in areas such as inventory valuation, impairment of long-lived assets, impairment of auction rate securities, goodwill and other indefinite lived intangible assets, accruals for self insurance, litigation, store opening, expansion, relocation and closing costs, the provision for sales returns, vendor allowances, stock-based compensation and income and certain other taxes. Actual results could differ from these estimates.

Cash and Cash Equivalents

The Company considers all highly liquid instruments purchased with original maturities of

three

months or less to be cash equivalents. Included in cash and cash equivalents are credit and debit card receivables from banks, which typically settle within

five

business days, of

$95.6

million and

$86.6

million as of

March 3, 2018

and

February 25, 2017,

respectively.

Investment Securities

Investment securities consist primarily of U.S. Treasury Bills with remaining maturities of less than

one

year and auction rate securities, which are securities with interest rates that reset periodically through an auction process. The U.S. Treasury Bills are classified as short term held-to-maturity securities and are stated at their amortized cost which approximates fair value. Auction rate securities are classified as available-for-sale and are stated at fair value, which had historically been consistent with cost or par value due to interest rates which reset periodically, typically every

days. As a result, there generally were

cumulative gross unrealized holding gains or losses relating to these auction rate securities. However, beginning in mid-

February 2008

due to market conditions, the auction process for the Company’s auction rate securities failed and continues to fail. These failed auctions result in a lack of liquidity in the securities, and affect their estimated fair values at

March 3, 2018

and

February 25, 2017,

but do

not

affect the underlying collateral of the securities. (See “Fair Value Measurements,” Note

and “Investment Securities,” Note

). All income from these investments is recorded as interest income.

Those investment securities which the Company has the ability and intent to hold until maturity are classified as held-to-maturity investments and are stated at amortized cost. Those investment securities which are bought and held principally for the purpose of selling them in the near term are classified as trading securities and are stated at fair market value.

Premiums are amortized and discounts are accreted over the life of the security as adjustments to interest income using the effective interest method. Dividend and interest income are recognized when earned.

Inventory Valuation

Merchandise inventories are stated at the lower of cost or market. Inventory costs are primarily calculated using the weighted average retail inventory method.

Under the retail inventory method, the valuation of inventories at cost and the resulting gross margins are calculated by applying a cost-to-retail ratio to the retail values of inventories. The cost associated with determining the cost-to-retail ratio includes: merchandise purchases, net of returns to vendors, discounts and volume and incentive rebates; inbound freight expenses; duty, insurance and commissions.

At any

one

time, inventories include items that have been written down to the Company’s best estimate of their realizable value. Judgment is required in estimating realizable value and factors considered are the age of merchandise and anticipated demand. Actual realizable value could differ materially from this estimate based upon future customer demand or economic conditions.

The Company estimates its reserve for shrinkage throughout the year based on historical shrinkage and any current trends, if applicable. Actual shrinkage is recorded at year end based upon the results of the Company’s physical inventory counts for locations at which counts were conducted. For locations where physical inventory counts were

not

conducted in the fiscal year, an estimated shrink reserve is recorded based on historical shrinkage and any current trends, if applicable. Historically, the Company’s shrinkage has

not

been volatile.

The Company accrues for merchandise in transit once it takes legal ownership and title to the merchandise; as such, an estimate for merchandise in transit is included in the Company’s merchandise inventories.

Property and Equipment

Property and equipment are stated at cost and are depreciated primarily using the straight-line method over the estimated useful lives of the assets (

forty

years for buildings;

five

twenty

years for furniture, fixtures and equipment; and

three

ten

years for computer equipment and software). Leasehold improvements are amortized using the straight-line method over the lesser of their estimated useful life or the life of the lease. Depreciation expense is primarily included within selling, general and administrative expenses.

The cost of maintenance and repairs is charged to earnings as incurred; significant renewals and betterments are capitalized. Maintenance and repairs amounted to

$125.7

million,

$131.6

million, and

$130.9

million for fiscal

2017,

2016

and

2015,

respectively.

Impairment of Long-Lived Assets

The Company reviews long-lived assets for impairment when events or changes in circumstances indicate the carrying value of these assets

may

exceed their current fair values. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the assets. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are

longer depreciated. The assets and liabilities of a disposal group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet. The Company has

not

historically recorded any material impairment to its long-lived assets. In the future, if events or market conditions affect the estimated fair value to the extent that a long-lived asset is impaired, the Company will adjust the carrying value of these long-lived assets in the period in which the impairment occurs.

Goodwill and Other Indefinite Lived Intangible Assets

The Company reviews goodwill and other intangibles that have indefinite lives for impairment annually or when events or changes in circumstances indicate the carrying value of these assets might exceed their current fair values. Impairment testing is based upon the best information available, including estimates of fair value which incorporate assumptions marketplace participants would use in making their estimates of fair value. The Company has

not

historically recorded an impairment to its goodwill and other indefinite lived intangible assets. As of

March 3, 2018,

the Company completed a quantitative impairment analysis of goodwill related to its reporting units. In completing this analysis, significant assumptions and estimates are required, including, but

not

limited to, projecting future cash flows, determining appropriate discount rates and terminal growth rates, and other assumptions. Although the Company believes the assumptions and estimates made are reasonable and appropriate, different assumptions and estimates could materially impact its reported financial results. Based upon the analysis performed, the Company concluded that

goodwill impairment existed as the fair value of each reporting unit was in excess of its carrying value. As of

March 3, 2018,

for certain other indefinite lived intangible assets, the Company assessed qualitative factors in order to determine whether any events and circumstances existed which indicated that it was more likely than

not

that the fair value of its indefinite lived intangible assets did

not

exceed their carrying values and concluded

such events or circumstances existed which would require an impairment test being performed. In the future, if events or market conditions affect the estimated fair value to the extent that an asset is impaired, the Company will adjust the carrying value of these assets in the period in which the impairment occurs.

Included within other assets in the accompanying consolidated balance sheets as of

March 3, 2018

and

February 25, 2017,

respectively, are

$305.4

million and

$305.3

million for indefinite lived tradenames and trademarks.

Self Insurance

The Company utilizes a combination of insurance and self insurance for a number of risks including workers’ compensation, general liability, cyber liability, property liability, automobile liability and employee related health care benefits (a portion of which is paid by its employees). Liabilities associated with the risks that the Company retains are estimated by considering historical claims experience, demographic factors, severity factors and other actuarial assumptions. Although the Company’s claims experience has

not

displayed substantial volatility in the past, actual experience could materially vary from its historical experience in the future. Factors that affect these estimates include but are

not

limited to: inflation, the number and severity of claims and regulatory changes. In the future, if the Company concludes an adjustment to self insurance accruals is required, the liability will be adjusted accordingly.

Deferred Rent

The Company accounts for scheduled rent increases contained in its leases on a straight-line basis over the term of the lease beginning as of the date the Company obtained possession of the leased premises. Deferred rent amounted to

$81.6

million and

$80.3

million as of

March 3, 2018

and

February 25, 2017,

respectively.

Cash or lease incentives (“tenant allowances”) received pursuant to certain store leases are recognized on a straight-line basis as a reduction to rent over the lease term. The unamortized portion of tenant allowances is included in deferred rent and other liabilities. The unamortized portion of tenant allowances amounted to

$133.4

million and

$119.4

million as of

March 3, 2018

and

February 25, 2017,

respectively.

Shareholders’ Equity

The Company has authorization to make repurchases from time to time in the open market or through other parameters approved by the Board of Directors pursuant to existing rules and regulations.

Between

December 2004

and

September 2015,

the Company’s Board of Directors authorized, through several share repurchase programs, the repurchase of

$11.950

billion of its shares of common stock. Since

2004

through the end of fiscal

2017,

the Company has repurchased approximately

$10.5

billion of its common stock through share repurchase programs. The Company also acquires shares of its common stock to cover employee related taxes withheld on vested restricted stock and performance stock unit awards.

During fiscal

2017,

the Company repurchased approximately

8.0

million shares of its common stock at a total cost of approximately

$252.4

million. During fiscal

2016,

the Company repurchased approximately

12.3

million shares of its common stock at a total cost of approximately

$547.0

million. During fiscal

2015

the Company repurchased approximately

18.4

million shares of its common stock at a total cost of approximately

$1.101

billion. The Company has approximately

$1.5

billion remaining of authorized share repurchases as of

March 3, 2018.

During fiscal

2016,

the Company’s Board of Directors authorized a quarterly dividend program. During fiscal

2017

and

2016,

total cash dividends of

$80.9

million and

$55.6

million were paid, respectively. Subsequent to the end of the

fourth

quarter of fiscal

2017,

April 11, 2018,

the Company’s Board of Directors declared a quarterly dividend increase to

$0.16

per share to be paid on

July 17, 2018

to shareholders of record at the close of business on

June 15, 2018.

The Company expects to pay quarterly cash dividends on its common stock in the future, subject to the determination by the Board of Directors, based on an evaluation of the Company’s earnings, financial condition and requirements, business conditions and other factors.

Cash dividends, if any, are accrued as a liability on the Company’s consolidated balance sheets and recorded as a decrease to additional paid-in capital when declared.

Fair Value of Financial Instruments

The Company’s financial instruments include cash and cash equivalents, investment securities, accounts payable, long term debt and certain other liabilities. The Company’s investment securities consist primarily of U.S. Treasury securities, which are stated at amortized cost, and auction rate securities, which are stated at their approximate fair value. The book value of the financial instruments, excluding the Company’s long term debt, is representative of their fair values (See “Fair Value Measurements,” Note

). The fair value of the Company’s long term debt is approximately

$1.310

billion as of

March 3, 2018,

which is based on quoted prices in active markets for identical instruments (i.e., Level

valuation), compared to the carrying value of approximately

$1.500

billion.

Revenue Recognition

Sales are recognized upon purchase by customers at the Company’s retail stores or upon delivery for products purchased from its websites. The value of point-of-sale coupons and point-of-sale rebates that result in a reduction of the price paid by the customer are recorded as a reduction of sales. Shipping and handling fees that are billed to a customer in a sale transaction are recorded in sales. Taxes, such as sales tax, use tax and value added tax, are

not

included in sales.

Revenues from gift cards, gift certificates and merchandise credits are recognized when redeemed. Gift cards have

provisions for reduction in the value of unused card balances over defined time periods and have

expiration dates.

Sales returns are provided for in the period that the related sales are recorded based on historical experience. Although the estimate for sales returns has

not

varied materially from historical provisions, actual experience could vary from historical experience in the future if the level of sales return activity changes materially. In the future, if the Company concludes that an adjustment to the sales return accrual is required due to material changes in the returns activity, the reserve will be adjusted accordingly.

Cost of Sales

Cost of sales includes the cost of merchandise, buying costs and costs of the Company’s distribution network including inbound freight charges, distribution facility costs, receiving costs, internal transfer costs and shipping and handling costs.

Vendor Allowances

The Company receives allowances from vendors in the normal course of business for various reasons including direct cooperative advertising, purchase volume and reimbursement for other expenses. Annual terms for each allowance include the basis for earning the allowance and payment terms, which vary by agreement. All vendor allowances are recorded as a reduction of inventory cost, except for direct cooperative advertising allowances which are specific, incremental and identifiable. The Company recognizes purchase volume allowances as a reduction of the cost of inventory in the quarter in which milestones are achieved. Advertising costs were reduced by direct cooperative allowances of

$38.5

million,

$37.4

million, and

$31.7

million for fiscal

2017,

2016,

and

2015,

respectively.

Store Opening, Expansion, Relocation and Closing Costs

Store opening, expansion, relocation and closing costs, including markdowns, asset residual values and projected occupancy costs, are charged to earnings as incurred.

Advertising Costs

Expenses associated with direct response advertising are expensed over the period during which the sales are expected to occur, generally

five

eight

weeks, and all other expenses associated with store advertising are charged to earnings as incurred. Net advertising costs amounted to

$444.4

million,

$381.1

million, and

$338.1

million for fiscal

2017,

2016,

and

2015,

respectively.

Stock-Based Compensation

The Company measures all employee stock-based compensation awards using a fair value method and records such expense in its consolidated financial statements. Currently, the Company’s stock-based compensation relates to restricted stock awards, stock options and performance stock units. The Company’s restricted stock awards are considered nonvested share awards.

Income Taxes

The Company files a consolidated federal income tax return. Income tax returns are also filed with each taxable jurisdiction in which the Company conducts business.

The Company accounts for its income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period that includes the enactment date.

December 22, 2017,

the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act, (the “Tax Act”). The Tax Act included a mandatory

one

-time tax on accumulated earnings of foreign subsidiaries, and as a result, all previously unremitted earnings for which

U.S. deferred tax liability had been previously accrued has now been subject to U.S. tax. Notwithstanding the U.S. taxation of these amounts, the Company intends to continue to reinvest the unremitted earnings of its Canadian subsidiary. Accordingly,

additional provision has been made for U.S. or additional non-U.S. taxes with respect to these earnings, except for the transition tax resulting from the Tax Act. In the event of repatriation to the U.S., it is expected that such earnings would be subject to non-U.S. withholding taxes offset, in whole or in part, by U.S. foreign tax credits.

The Company recognizes the tax benefit from an uncertain tax position only if it is at least more likely than

not

that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than

fifty

percent likelihood of being realized upon settlement with the taxing authorities.

Judgment is required in determining the provision for income taxes and related accruals, deferred tax assets and liabilities. In the ordinary course of business, there are transactions and calculations where the ultimate tax outcome is uncertain. Additionally, the Company’s tax returns are subject to audit by various tax authorities. Although the Company believes that its estimates are reasonable, actual results could differ from these estimates.

Earnings per Share

The Company presents earnings per share on a basic and diluted basis. Basic earnings per share is computed by dividing net earnings by the weighted average number of shares outstanding. Diluted earnings per share is computed by dividing net earnings by the weighted average number of shares outstanding, including the dilutive effect of stock-based awards as calculated under the treasury stock method.

Stock-based awards of approximately

8.0

million,

4.4

million, and

2.6

million shares were excluded from the computation of diluted earnings per share as the effect would be anti-dilutive for fiscal

2017,

2016,

and

2015,

respectively.

Recent Accounting Pronouncements

November 2015,

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

2015

17,

Income Taxes (Topic

740

): Balance Sheet Classification of Deferred Taxes. This guidance requires an entity to classify deferred tax assets and liabilities as noncurrent assets and liabilities on the balance sheet. ASU

2015

is effective for annual reporting periods beginning after

December 15, 2016,

including interim periods within that reporting period, with earlier adoption permitted. ASU

2015

can be adopted either prospectively or retrospectively to each prior reporting period presented. At the beginning of the

first

quarter of fiscal

2017,

the Company adopted this guidance retrospectively, which resulted in decreases to other current assets of

$218.8

million and deferred rent and other liabilities of

$23.4

million and an increase to other assets of

$195.5

million as of

February 25, 2017.

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 the accounting for share-based payment transactions, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. ASU

2016

requires, on a prospective basis, recognition of excess tax benefits and tax deficiencies (resulting from an increase or decrease in the fair value of an award from grant date to the vesting or exercise date) in the provision for income taxes as a discrete item in the period in which they occur. The ASU also changes the classification of excess tax benefits from a financing activity to an operating activity in the Company’s consolidated statements of cash flows. In addition, ASU

2016

allows companies to make an accounting policy election to either estimate expected forfeitures or account for them as they occur. ASU

2016

is effective for fiscal years beginning after

December 15, 2016,

and interim periods within those years, with early adoption permitted. The Company adopted ASU

2016

during the

first

quarter of fiscal

2017.

During the fiscal year ended

March 3, 2018,

the Company recognized in income tax expense discrete tax expenses of

$13.0

million related to tax deficiencies. Additionally, the Company elected to account for forfeitures as an estimate of the number of awards that are expected to vest, which is consistent with its accounting policy prior to adoption of ASU

2016

09.

The Company adopted the provisions of ASU

2016

related to changes in the consolidated statements of cash flows on a retrospective basis. As such, excess tax benefits are now classified as an operating activity in the Company’s Consolidated Statements of Cash Flows instead of as a financing activity. As a result, excess tax benefits of

$1.5

million and

$10.3

million for the

twelve

months ended

February 25, 2017

and

February 27, 2016,

respectively, were reclassified from financing activities to operating activities. ASU

2016

also requires that the value of shares withheld from employees upon vesting of stock awards in order to satisfy any applicable tax withholding requirements is presented within financing activities in the Company’s Consolidated Statements of Cash Flows, which is consistent with the Company’s historical presentation, and therefore had

impact to the Company.

February 2018,

the FASB issued ASU

2018

02,

Income Statement - Reporting Comprehensive Income (Topic

220

), which allows a reclassification from accumulated other comprehensive income (loss) to retained earnings for stranded tax effects resulting from the Tax Act. The amount of the reclassification is calculated based on the effect of the change in the U.S. federal corporate income tax rate on the gross deferred tax amounts at the date of the enactment of the Tax Act related to items that remained in accumulated other comprehensive income (loss) at that time. This ASU is effective for fiscal years and interim periods within those years beginning after

December

15,

2018

and early adoption is permitted. The Company early adopted this ASU in the

fourth

quarter of fiscal

2017

and reclassified

$0.6

million of stranded deferred tax benefits from accumulated other comprehensive income (loss) to retained earnings.

May 2014,

the FASB issued ASU

2014

09,

Revenue from Contracts with Customers (Topic

606

)

. This guidance requires an entity to recognize revenue in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard also will result in enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In

July 2015,

the FASB issued ASU

2015

14,

Revenue from Contracts with Customers (Topic

606

): Deferral of the Effective Date

. This guidance deferred the effective date of ASU

2014

for

one

year from the original effective date. In accordance with the deferral, ASU

2014

is effective for annual reporting periods beginning after

December 15, 2017,

including interim periods within that reporting period. In

2016,

the FASB issued several amendments to clarify various aspects of the implementation guidance. ASU

2014

can be adopted either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment as of the date of adoption.

The majority of the Company’s revenue is generated from the sale of product in its retail stores, which will continue to be recognized when control of the product is transferred to the customer. The Company has substantially completed its analysis of its revenue streams and expects the adoption to result in the following changes:

A change in the timing of recognizing advertising expense related to direct response advertising. These costs that were previously expensed over the period during which the sales were expected to occur will now be expensed the

first

time the advertising takes place.

A change in the presentation of the sales return reserve on the consolidated balance sheet, as estimated costs of returns will be recorded as a current asset rather than netted with the sales return reserve.

Changes in the presentation of certain other revenue streams on the consolidated statement of earnings between net sales, cost of sales, and selling, general and administrative expenses.

The Company will adopt this standard in the

first

quarter of fiscal

2018

using the modified retrospective method and will record the cumulative effect of applying this standard to opening retained earnings. The Company does

not

expect the adoption of this standard to have a material impact on its consolidated financial position, results of operations, or cash flows on an ongoing basis, including any changes in its consolidated balance sheet or statements of earnings.

February 2016,

the FASB issued ASU

2016

02,

Leases (Topic

842

This guidance requires an entity to recognize lease liabilities and a right-of-use asset for all leases on the balance sheet and to disclose key information about the entity's leasing arrangements. ASU

2016

is effective for annual reporting periods beginning after

December 15, 2018,

including interim periods within that reporting period, with earlier adoption permitted. ASU

2016

must be adopted using a modified retrospective approach for all leases existing at, or entered into after the date of initial adoption, with an option to elect to use certain transition relief. The Company is currently evaluating the impact of this new standard on its consolidated financial statements and related disclosures, but expects that it will result in a significant increase in the assets and liabilities recorded on the consolidated balance sheet.

January 2017,

the FASB issued ASU

2017

01,

Business Combinations (Topic

805

): Clarifying the Definition of a Business

. ASU

2017

requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of identifiable assets, the set of assets would

not

represent a business. Also, in order to be considered a business, an acquisition would have to include an input and a substantive process that together significantly contribute to the ability to produce outputs. Under the update, fewer sets of assets are expected to be considered businesses. ASU

2017

is effective for annual reporting periods beginning after

December 15, 2017,

including interim periods within that reporting period. The adoption of this guidance is

not

expected to have a significant effect on the Company's consolidated financial position, results of operations, or cash flows.

January 2017,

the FASB issued ASU

2017

04,

Intangibles – Goodwill and Other (Topic

350

): Simplifying the Test for Goodwill Impairment

. ASU

2017

eliminates the requirement to calculate the implied fair value of goodwill to measure the amount of impairment loss, if any, under the

second

step of the current goodwill impairment test. Under the update, the goodwill impairment loss would be measured as the amount by which a reporting unit’s carrying value exceeds its fair value,

not

to exceed the carrying amount of goodwill. ASU

2017

is effective for annual reporting periods beginning after

December 15, 2019,

with early adoption permitted. The adoption of this guidance is

not

expected to have a significant effect on the Company's consolidated financial position, results of operations, or cash flows.