Recent Accounting Pronouncements

Recently Issued

May 2014,

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

No.

2014

09,

Revenue from Contracts with Customers

. ASU

2014

supersedes the revenue recognition requirements in Topic

605,

Revenue Recognition, and requires entities to recognize revenue in a way 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. In

July 2015,

the FASB issued a

one

-year deferral of ASU

2014

making it effective for annual reporting periods beginning on or after

December 15, 2017,

while also providing for early adoption

not

to occur before the original effective date. The Company currently anticipates it will adopt the new standard on a modified retrospective basis with the cumulative effect of the change reflected in retained earnings as of

January 1, 2018

and to

not

restate prior periods. The Company has commenced work to assess the impact of the new revenue standard on its principal revenue streams. The Company has

not

made a determination on the impact to its consolidated financial statements.

February 2016,

the FASB issued ASU

No.

2016

02,

Leases

(Topic

842

). ASU

2016

amends existing lease accounting requirements. The most significant change will result in the recognition of lease assets and lease liabilities by lessees for virtually all leases. The new guidance will also require significant additional disclosures about the amount, timing, and uncertainty of cash flows from leases. ASU

2016

is effective for fiscal years and interim periods beginning after

December 15, 2018.

Upon adoption, entities are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. Early adoption is permitted, and a number of optional practical expedients

may

be elected to simplify the impact of adoption. The Company is assessing ASU

2016

and the impact that adopting this new accounting standard will have on its consolidated financial statements and footnote disclosures.

June 2016,

the FASB issued ASU

No.

2016

13,

Financial Instruments

(Topic

326

) Credit Losses. ASU

2016

changes the impairment model for most financial assets and certain other instruments. Under the new standard, entities holding financial assets and net investment in leases that are

not

accounted for at fair value through net income are to be presented at the net amount expected to be collected. An allowance for credit losses will be a valuation account that will be deducted from the amortized cost basis of the financial asset to present the net carrying value at the amount expected to be collected on the financial asset. ASU

2016

is effective as of

January 1, 2020.

Early adoption is permitted. The adoption of this standard is

not

expected to have a material impact on the Company’s consolidated financial statements or footnote disclosures.

January 2017,

the FASB issued ASU

No.

2017

04,

Intangibles-Goodwill and Other

(Topic

350

): Simplifying the Test for Goodwill Impairment

ASU

2017

will simplify the subsequent measurement of goodwill by eliminating Step

from the goodwill impairment test. Current guidance requires that companies compute the implied fair value of goodwill under Step

by performing procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. This standard will require companies to perform annual or interim goodwill impairment tests by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should

not

exceed the total amount of goodwill allocated to that reporting unit. This standard will be effective for annual periods beginning after

December 15, 2019,

including interim periods occurring after that date, and will be applied prospectively. Early adoption of this standard is permitted. The adoption of this standard is

not

expected to have a material impact on the Company’s consolidated financial statements or footnote disclosures.

Recently Adopted

March 2016,

the FASB issued ASU

No.

2016

09,

Compensation

(Topic

718

) Stock Compensation. ASU

2016

identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as 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. ASU

2016

is effective as of

January 1, 2017.

Since

January 1, 2017,

the Company has recognized excess tax benefits and tax deficiencies related to share-based payments in the Condensed Consolidated Statements of Operations and Comprehensive Income as a component of the provision for income taxes on a prospective basis. Such excess tax benefits and tax deficiencies were previously recorded in equity. The Company also began presenting tax-related cash flows resulting from share-based payments as operating activities in the Condensed Consolidated Statements of Cash Flows, and retrospectively revised prior periods to reflect this provision. Accordingly, the Condensed Consolidated Statement of Cash Flows for the

nine

months ended

September 30, 2016

was revised by increasing net cash provided by operating activities by

$0.4

million and by decreasing net cash used in financing activities by

$0.4

million. Lastly, as of

January 1, 2017,

the Company elected to recognize forfeitures as they occur rather than estimate forfeitures each period on a modified retrospective basis. See Notes

and

for additional information regarding the impacts on the condensed consolidated financial statements.