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Basis of Presentation and New Accounting Pronouncements (Policies)
9 Months Ended
Sep. 30, 2014
Basis Of Presentation And New Accounting Pronouncements [Abstract]  
Revenue from Contracts with Customers

Revenue from Contracts with Customers

In May 2014, the Financial Accounting Standards Board (FASB) issued ASU 2014-09, “Revenue from Contracts with Customers.” ASU 2014-09 was developed to enable financial statement users to better understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.  The update’s core principle is that an entity should recognize revenue to depict 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.  Companies are to use a five-step contract review model to ensure revenue gets recognized, measured and disclosed in accordance with this principle.  

ASU 2014-09 is effective for fiscal years and interim periods beginning after December 15, 2016.  The amendments in this update should be applied retrospectively either to each prior reporting period presented or to disclose the cumulative effect recognized at the date of initial application.  Gentherm is developing a plan to complete the five-step contract review process for all existing contracts with customers.  We are still in the process of determining the impact the implementation of ASU 2014-09 will have on the Company’s financial statements.  

Share-Based Payments

Share-Based Payments

In June 2014, the FASB issued ASU 2014-12, “Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period.”  This update provides guidance on the treatment of awards containing performance targets that affect vesting and that could be achieved after an employee’s requisite service period.  The update states that these types of performance targets should be treated as performance conditions and, therefore, not reflected in estimating the fair value of awards at the grant date.  Compensation cost shall be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service period has been rendered.  Should the probability of achievement occur before the end of the requisite service period, the remaining unrecognized compensation cost shall be recognized prospectively over the remaining requisite service period.  The total compensation cost reflects the number of awards expected to vest and shall be adjusted to reflect when those awards ultimately vest.  

ASU 2014-12 is effective for fiscal years and interim periods beginning after December 15, 2015.   Gentherm has not assigned specific performance targets to share-based awards that are currently outstanding and therefore it is unlikely this update will materially impact the Company’s financial statements.