Significant Accounting Policies (Policy)

9 Months Ended

Sep. 30, 2019

Significant Accounting Policies [Abstract]

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements - In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-04, Simplifying the Test for Goodwill Impairment (“ASU 2017-04”). The objective of ASU 2017-04 is to simplify the subsequent measurement of goodwill by entities performing their annual goodwill impairment tests by comparing the fair value of a reporting unit, including income tax effects from any tax-deductible goodwill, with its carrying amount and recognizing an impairment charge for the amount by which the carrying amount exceeds fair value. ASU 2017-04 is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption of ASU 2017-04 is permitted on goodwill impairment tests performed after January 1, 2017. ASU 2017-04 should be applied on a prospective basis. The Company is currently evaluating the impact of adopting ASU 2017-04; however, the standard is not expected to have a material impact on its consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) (“ASU 2018-13”). The objective of ASU 2018-13 is to modify disclosure requirements on fair value measurements. The guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. The amendments should be adopted using the prospective method for certain disclosures within the guidance and retrospectively upon the effective date. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40) (“ASU 2018-15”). The objective of ASU 2018-15 is to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with those incurred to develop or obtain internal-use software. The guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. The amendments can be applied either retrospectively or prospectively. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements.

In October 2018, the FASB issued ASU 2018-17, Targeted Improvements to Related Party Guidance for Variable Interest Entities (“ASU 2018-17”). The objective of ASU 2018-17 is to improve (i) the application of variable interest entity guidance to private companies under common control and (ii) consideration of indirect interests held through related parties under common control for determining whether fees paid to decision makers and service providers are variable interests. The guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements.

Changes Related to Adoption of ASU 2016-02

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). The objective of ASU 2016-02 and subsequent amendments is to recognize lease assets and lease liabilities by lessees for those leases classified as operating leases under previous US GAAP. The Company adopted ASU 2016-02 and the subsequent amendments retrospectively on January 1, 2019 in its condensed consolidated financial statements for the three and nine months ended September 30, 2019. The Company used the alternative modified retrospective method, also known as the transition relief method permitted under ASU 2018-11, Leases (Topic 842) Targeted Improvements, which did not require the restatement of prior periods and instead recognized a $0.3 million cumulative-effect adjustment to retained earnings upon transition. See Note 11 for additional information related to the Company’s lease obligations.

When adopting the leasing standard, the Company made the following policy elections:

The Company elected the practical expedient to account for lease and non-lease components as a single lease component for all asset classes;

The Company elected the short-term lease measurement and recognition exemption and did not establish right-of-use (“ROU”) assets or lease liabilities for operating leases with terms of 12 months or less;

The Company used its original assumptions for operating leases entered into prior to adoption, electing not to use the hindsight practical expedient;

The Company elected to use the package of practical expedients for transition and did not reassess (i) whether expired or existing contracts were leases or contained leases, (ii) the classification of its existing leases, or (iii) initial direct costs for existing leases; and

The Company elected not to evaluate existing or expired land easements under the leasing standard prior to the date of adoption.

The impact of adopting the leasing standard on the Company’s condensed consolidated balance sheet as of January 1, 2019 was as follows:



Amounts in thousands	Prior to Adoption		Changes Related to Adoption of ASU 2016-02		Post Adoption
Operating Leases
Leased right-of-use assets, net	$	—	$	38,276	$	38,276
Prepaid expenses		1,650		(136)		1,514
Accrued liabilities		15,664		(639)		15,025
Operating lease liabilities, net of current portion		—		40,410		40,410
Taxes payable and other		3,381		(1,350)		2,031
Retained earnings		76,056		(232)		75,824
Non-controlling interests		7,062		(49)		7,013

Finance Leases
Property and equipment, net		187,017		(362)		186,655
Leased right-of-use assets, net		—		362		362
Current portion of long-term debt		17,482		(123)		17,359
Current portion of finance lease liabilities		—		123		123
Long-term debt, net of current portion and deferred financing costs		42,041		(310)		41,731
Finance lease liabilities, net of current portion	$	—	$	310	$	310

As of December 31, 2018, maturities related to operating leases were reported as follows:


Amounts in thousands
2019	$	4,079
2020		2,783
2021		2,748
2022		2,700
2023		2,646
Total	$	14,956