Significant Accounting Policies (Policies)

12 Months Ended

Jun. 30, 2020

Consolidation, Policy [Policy Text Block]

Principles of consolidation

: The consolidated financial statements include the accounts of The L. S. Starrett Company and its subsidiaries, all of which are wholly-owned. All intercompany items have been eliminated in consolidation.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash:

Cash held by foreign subsidiaries amounted to

$7.1

million and

$8.9

million at

June 30, 2020

and

June 30, 2019,

respectively. Of the

June 30, 2020

balance,

$4.3

million in U.S. dollar equivalents was held in British Pounds Sterling and

$0.7

million in U.S. dollar equivalents was held in Brazilian Reals. Of the

June 30, 2019

balance,

$4.6

million in U.S. dollar equivalents was held in British Pounds Sterling and

$2.6

million in U.S. dollar equivalents was held in Brazilian Reals.

The Company plans to permanently reinvest cash held in foreign subsidiaries. Cash held in foreign subsidiaries is

not

available for use in the U.S. without the likely incurrence of U.S. federal and state income and withholding tax consequences.

Financial Instruments and Derivatives [Policy Text Block]

Financial instruments and derivatives

: The Company's financial instruments include cash, accounts receivable, accounts payable, accrued expenses and debt. The carrying value of cash and accounts receivable approximates fair value because of the short-term nature of these instruments. The carrying value of debt, which is at current market interest rates, also approximates its fair value. The Company's U.K. subsidiary utilizes forward exchange contracts to reduce currency risk. The notional amounts of contracts outstanding as of both

June 30, 2020

and

June 30, 2019

were zero.

Receivable [Policy Text Block]

Accounts receivable

: Accounts receivable consist of trade receivables from customers. The expense (income) for bad debts amounted to

$0.2

million, $(

0.1

) million, and

$0.5

million in fiscal

2020,

2019

and

2018,

respectively. In establishing the allowance for doubtful accounts, management considers historical losses, the aging of receivables and existing economic conditions.

Inventory, Policy [Policy Text Block]

Inventories

: Inventories are stated at the lower of cost or market. “Market” is defined as “net realizable value,” or the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Substantially all United States inventories are valued using the last-in-

first

-out “LIFO” method. All non-U.S. subsidiaries use the

first

-in-

first

-out “FIFO” method or the average cost method. LIFO is

not

a permissible method of inventory costing for tax purposes outside the U.S.

Property, Plant and Equipment, Policy [Policy Text Block]

Property Plant and Equipment

: The cost of buildings and equipment is depreciated using straight-line and accelerated methods over their estimated useful lives as follows: buildings and building improvements

years, machinery and equipment

years. The construction in progress balances in buildings, building improvements and machinery and equipment at

June 30, 2020

and

June 30, 2019

were

$0.6

million and

$1.9

million, respectively. Repairs and maintenance of equipment are expensed as incurred.

Lessee, Leases [Policy Text Block]

Leases:

The Company adopted Accounting Standards Codification

842,

Leases ("ASC

842"

)

July 1, 2019.

The Company has leased buildings, manufacturing equipment and autos that are classified as operating lease right-of use "ROU" assets and operating lease liabilities in the Company's Consolidated Balance Sheets. ROU assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date for leases exceeding

months. Minimum lease payments include only the fixed lease component of the agreement.

Although currently the Company's Finance Leases are considered di minimis, leases are capitalized under the criteria set forth in Accounting Standards Codification (ASC)

842,

“Leases”.

Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block]

Long-Lived Asset Impairment:

Impairment losses are recorded when indicators of impairment, such as plant closures, are present and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amount. Goodwill impairment analysis fair values are calculated on a discounted cash flow basis.

Recoverability of the net book value of long-lived assets is determined by comparison of the carrying amount to estimated future undiscounted net cash flows the asset group is expected to generate. Estimating these cash flows and terminal values requires management to make judgments about the growth in demand for our products, sustainability of gross margins, and our ability to achieve economies of scale. If assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the long-lived asset exceeds its fair value.

During the

fourth

quarter, as a result of the COVID-

pandemic which was considered to be a triggering event, at the private software company and Bytewise, due to its negative impact on the Company's revenue the Company performed the intangible assets impairment assessment by running a quantitative analyses on an undiscounted basis for the long-lived assets, including intangible assets of Bytewise and the private software company, respectively. As a result of this analysis, the Company concluded that the private software company's Intangible Assets were impaired

$2.8

million. It was determined that there was

impairment of long-lived assets or intangibles at the Bytewise reporting unit.

Goodwill and Intangible Assets, Intangible Assets, Policy [Policy Text Block]

Intangible assets

: Identifiable intangibles are recorded at cost and are amortized on a straight-line basis over a

year period. The estimated useful lives of the intangible assets subject to amortization are:

years for patents,

years for trademarks and trade names,

years for completed technology,

years for non-compete agreements,

years for customer relationships and

years for software development. The Company recorded an impairment charge of

$2.8

million in fiscal year

2020

and

none

in fiscal years

2019

and

2018.

See Note

“Goodwill and Intangibles” to the Consolidated Financial Statements for impairment charges.

Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block]

Goodwill

: Goodwill represents costs in excess of fair values assigned to the underlying net assets of acquired businesses. Goodwill is

not

subject to amortization but is tested for impairment annually and at any time when events suggest impairment

may

have occurred. The Company annually tests the goodwill of

two

reporting units associated with the

November 2011

acquisition of Bytewise and the

February 2017

acquisition of a private software company. Bytewise is tested in

October

and the software reporting unit is tested in

February.

The Company contracted with a professional valuation firm “the firm” to perform a quantitative analysis (commonly referred to as “Step One”) for its

February 1, 2020

annual assessment of goodwill associated with its purchase of a private software company. The firm assisted the Company in estimating fair value using an income approach based on the present value of future cash flows. The Company believes this approach yields the most appropriate evidence of fair value. During the

March

quarter fiscal year

2020,

it determined the fair value assessment of the software development company's goodwill exceeded the carrying amount.

The Company performed a qualitative analysis of its Bytewise reporting unit for its

October 1, 2019

annual assessment of goodwill (commonly referred to as “Step Zero”). From a qualitative perspective, in evaluating whether it is more likely than

not

that the fair value of a reporting unit exceeds its carrying amount, relevant events and circumstances are taken into account, with greater weight assigned to events and circumstances that most affect the fair value or the carrying amounts of its assets. Items that were considered included, but were

not

limited to, the following: macroeconomic conditions, industry and market conditions, cost factors, overall financial performance and changes in management or key personnel.

During the

June

quarter fiscal year

2020

the Company, considering the COVID-

pandemic a triggering event at the private software company and Bytewise due to lower sales, tested the Goodwill at both reporting units and concluded that the fair value, on a discounted cash flow basis, was less than the carrying value and took a goodwill impairment charge of

$3.7

million. See Note

“Goodwill and Intangibles” to the Consolidated Financial Statements for impairment charges.

Revenue [Policy Text Block]

Revenue recognition

: On

July 1, 2018,

the Company adopted ASC Topic

606,

Revenue from Contracts with Customers, and all the related amendments (“ASC Topic

606”

), using the modified retrospective method. In addition, the Company elected to apply certain of the permitted practical expedients within the revenue recognition guidance and make certain accounting policy elections, including those related to significant financing components, sales taxes and shipping and handling activities. Most of the changes resulting from the adoption of ASC Topic

606

July 1, 2018

were changes in presentation within the Consolidated Balance Sheet. Therefore, while the Company made adjustments to certain opening balances on its

July 1, 2018

Consolidated Balance Sheet, the Company made

adjustment to opening Retained Earnings. The impact of the adoption of ASC Topic

606

has been immaterial to its net income on an ongoing basis; however, adoption did increase the level of disclosures concerning net sales. Results for reporting periods beginning

July 1, 2018

are presented under the new guidance, while prior period amounts continue to be reported in accordance with previous guidance without revision.

The core principle of ASC Topic

606

is that an entity recognizes revenue to depict the transfer of promised goods and services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The application of the FASB's guidance on revenue recognition requires the Company to recognize as revenue the amount of consideration that the Company expects to receive in exchange for goods and services transferred to our customers. To do this, the Company applies the

five

-step model prescribed by the FASB, which requires us to: (

) identify the contract with the customer; (

) identify the performance obligations in the contract; (

) determine the transaction price; (

) allocate the transaction price to the performance obligations in the contract; and (

) recognize revenue when, or as, the Company satisfies a performance obligation.

The Company accounts for a contract or purchase order when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. Revenue is recognized when control of the product passes to the customer, which is upon shipment, unless otherwise specified within the customer contract or on the purchase order as delivery, and is recognized at the amount that reflects the consideration the Company expects to receive for the products sold, including various forms of discounts. When revenue is recorded, estimates of returns are made and recorded as a reduction of revenue. Contracts with customers are evaluated to determine if there are separate performance obligations related to timing of product shipment that will be satisfied in different accounting periods. When that is the case, revenue is deferred until each performance obligation is met.

performance obligation related amounts were deferred as of

June 30, 2020.

Purchase orders are of durations less than

one

year. As such, the Company applies the practical expedient in ASC paragraph

606

and does

not

disclose information about remaining performance obligations that have original expected durations of

one

year or less, for which work has

not

yet been performed.

Certain taxes assessed by governmental authorities on revenue producing transactions, such as value added taxes, are excluded from revenue and recorded on a net basis. Cooperative advertising payments made to customers are included as advertising expense in selling, general and administrative expense in the Consolidated Statements of Operations.

Performance Obligations

The Company's primary source of revenue is derived from the manufacture and distribution of metrology tools and equipment and saw blades and related products sold to distributors. The Company recognizes revenue for sales to our customers when transfer of control of the related good or service has occurred. Any of the Company's revenue

not

recognized under the point in time approach for the year ended

June 30, 2020,

was determined to be immaterial. Contract terms with certain metrology equipment customers could result in products and services being transferred over time as a result of the customized nature of some of the Company's products, together with contractual provisions in the customer contracts that provide the Company with an enforceable right to payment for performance completed to date; however, under typical terms, the Company does

not

have the right to consideration until the time of shipment from its manufacturing facilities or distribution centers, or until the time of delivery to its customers. If certain contracts in the future provide the Company with this enforceable right of payment, the timing of revenue recognition from products transferred to customers over time

may

be slightly accelerated compared to the Company's right to consideration at the time of shipment or delivery.

The Company's typical payment terms vary based on the customer, geographic region, and the type of goods and services in the contract or purchase order. The period of time between invoicing and when payment is due is typically

not

significant. Amounts billed and due from the Company's customers are classified as receivables on the Consolidated Balance Sheet. As the Company's standard payment terms are usually less than

one

year, the Company has elected the practical expedient under ASC paragraph

606

not

assess whether a contract has a significant financing component.

The Company's customers take delivery of goods, and they are recognized as revenue at the time of transfer of control to the customer, which is usually at the time of shipment, unless otherwise specified in the customer contract or purchase order. This determination is based on applicable shipping terms, as well as the consideration of other indicators, including timing of when the Company has a present right to payment, when physical possession of products is transferred to customers, when the customer has the significant risks and rewards of ownership of the asset, and any provisions in contracts regarding customer acceptance.

While unit prices are generally fixed, the Company provides variable consideration for certain of our customers, typically in the form of promotional incentives at the time of sale. The Company utilizes the most likely amount consistently to estimate the effect of uncertainty on the amount of variable consideration to which the Company would be entitled. The most likely amount method considers the single most likely amount from a range of possible consideration amounts. The most likely amounts are based upon the contractual terms of the incentives and historical experience with each customer. The Company records estimates for cash discounts, promotional rebates, and other promotional allowances in the period the related revenue is recognized (“Customer Credits”). The provision for Customer Credits is recorded as a reduction from gross sales and reserves for Customer Credits are presented within accrued sales incentives on the Consolidated Balance Sheet. Actual Customer Credits have

not

differed materially from estimated amounts for each period presented. Amounts billed to customers for shipping and handling are included in net sales and costs associated with shipping and handling are included in cost of sales. The Company has concluded that its estimates of variable consideration are

not

constrained according to the definition within the new standard. Additionally, the Company applies the practical expedient in ASC paragraph

606

18B

and accounts for shipping and handling activities that occur after the customer has obtained control of a good as a fulfillment activity, rather than a separate performance obligation.

With the adoption of ASC Topic

606,

the Company reclassified certain amounts related to variable consideration. Under ASC Topic

606,

the Company is required to present a refund liability and a return asset within the Consolidated Balance Sheet, whereas in periods prior to adoption, the Company presented the estimated margin impact of expected returns as a contra-asset within accounts receivable. The changes in the refund liability are reported in net sales, and the changes in the return asset are reported in cost of sales in the Consolidated Statements of Operations. As a result, the balance sheet presentation was adjusted beginning in fiscal

2019.

As of

June 30, 2020,

and

2019,

the balances of the return asset were

$0.1

million and the balance of the refund liability were

$0.2

million, and they are presented within prepaid expenses and other current assets and accrued expenses, respectively, on the Consolidated Balance Sheet.

The Company, in general, warrants its products against certain defects in material and workmanship when used as designed, for a period of up to

year. The Company does

not

sell extended warranties.

Contract Balances

Contract assets primarily relate to the Company's rights to consideration for work completed but

not

billed at the reporting date on contracts with customers. Contract assets are transferred to receivables when the rights become unconditional. Contract liabilities primarily relate to contracts where advance payments or deposits have been received, but performance obligations have

not

yet been met, and therefore, revenue has

not

been recognized. The Company had

contract asset balances, but had contract liability balances of

$0.4

million and

$0.3

June 30, 2020

and

2019,

respectively.

Receivables, Trade and Other Accounts Receivable, Allowance for Doubtful Accounts, Policy [Policy Text Block]

Allowance for doubtful accounts

: The allowance for doubtful accounts of

$0.7

million at the end of fiscal

2020

compared to

$0.7

million at the end of fiscal

2019

is based on our assessment of the collectability of specific customer accounts and the aging of our accounts receivable. While the Company believes that the allowance for doubtful accounts is adequate, if there is a deterioration of a major customer's credit worthiness, actual write-offs are higher than our previous experience, or actual future returns do

not

reflect historical trends, the estimates of the recoverability of the amounts due the Company could be adversely affected.

Advertising Cost [Policy Text Block]

Advertising costs

: The Company's policy is to generally expense advertising costs as incurred, except catalogs costs, which are deferred until mailed. Advertising costs were expensed as follows:

$3.6

million in fiscal

2020,

$5.0

million in fiscal

2019

and

$5.1

million in fiscal

2018

and are included in selling, general and administrative expenses.

Freight Cost, Policy [Policy Text Block]

Freight costs

: The cost of outbound freight and the cost for inbound freight included in material purchase costs are both included in cost of sales.

Standard Product Warranty, Policy [Policy Text Block]

Warranty expense

: The Company's warranty obligation is generally

one

year from shipment to the end user and is affected by product failure rates, material usage, and service delivery costs incurred in correcting a product failure. Historically, the Company has

not

incurred significant warranty expense and consequently its warranty reserves are

not

material.

Pension and Other Postretirement Plans, Policy [Policy Text Block]

Pension and Other Postretirement Benefits:

The Company has

two

defined benefit pension plans,

one

for U.S. employees and another for U.K. employees. The Company also has defined contribution plans. The Company amended its Postretirement Medical Plan effective

December 31, 2013,

whereby the Company terminated eligibility for employees under the age of

65.

December 21, 2016,

the Company amended the U.S. defined benefit pension plan to freeze benefit accruals effective

December 31, 2016.

Consequently, the Plan is closed to new participants and current participants

longer earn additional benefits after

December 31, 2016.

The U.K. Plan was closed to new entrants in fiscal

2009.

The Company sponsors funded U.S. and non-U.S. defined benefit pension plans covering the majority of our U.S. and U.K. employees. The Company also sponsors an unfunded postretirement benefit plan that provides health care benefits and life insurance coverage to eligible U.S. retirees. Under the Company's current accounting method, both pension plans use fair value as the market-related value of plan assets and continue to recognize actuarial gains or losses within the corridor in other comprehensive income (loss) but instead of amortizing net actuarial gains or losses in excess of the corridor in future periods, such excess gains and losses, if any, are recognized in net periodic benefit cost as of the plan measurement date, which is the same as the fiscal year end of the Company. This mark-to-market (MTM adjustment) method is a permitted option which results in immediate recognition of excess net actuarial gains and losses in net periodic benefit cost instead of in other comprehensive income (loss). Such immediate recognition in net periodic benefit cost increases the volatility of net periodic benefit cost. The MTM adjustments to net periodic benefit cost for fiscal years

2020,

2019

and

2018

were

$16.9

million,

$0.3

million, and

$0.1

million, respectively.

Income Tax, Policy [Policy Text Block]

Income taxes

: Deferred tax expense results from differences in the timing of certain transactions for financial reporting and tax purposes. Deferred taxes have

not

been recorded on approximately

$56.4

million of undistributed earnings of foreign subsidiaries as of

June 30, 2020

and the related unrealized translation adjustments because such amounts are considered permanently invested. In addition, it is possible that remittance taxes, if any, would be reduced by U.S. foreign tax credits to the extent available, after consideration of U.S. Tax Reform and the dividends received deduction. Valuation allowances are recognized if, based on the available evidence, it is more likely than

not

that some portion of the deferred tax assets will

not

be realized.

Research and Development Expense, Policy [Policy Text Block]

Research and development

: Research and development costs are expensed, primarily in selling, general and administrative expenses, and were as follows:

$3.8

million in fiscal

2020,

$3.7

million in fiscal

2019,

and

$3.6

million in fiscal

2018.

Earnings Per Share, Policy [Policy Text Block]

Earnings per share (EPS)

: Basic EPS is computed by dividing earnings (loss) available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution by securities that could share in the earnings. The Company had

86,065,

68,378,

and

23,771,

of potentially dilutive common shares in fiscal

2020,

2019

and

2018,

respectively, resulting from shares issuable under its stock-based compensation plans. These additional shares are

not

used in the diluted EPS calculation in loss years.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

Translation of foreign currencies

: The assets and liabilities on the financial statements of our foreign subsidiaries where the local currency is in functional currency, are translated at exchange rates in effect on reporting dates. The income statement is translated at average exchange rates over the reporting month throughout the year.

As equity accounts in the Consolidated Financial Statements are translated at historical exchange rates, the resulting foreign currency translation adjustments “CTA” are recorded in other comprehensive income (loss).

Other foreign subsidiaries

may

also contain assets or liabilities denominated in a currency other than the prevailing functional currency. These translations are adjusted into the functional currency on a monthly basis, See Note

“Other Income and Expense” to the Consolidated Financial Statements.

Use of Estimates, Policy [Policy Text Block]

Use of accounting estimates

: The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses during the reporting period. Judgments, assumptions and estimates are used for, but

not

limited to: the allowances for doubtful accounts receivable and returned goods; inventory allowances; income tax valuation allowances, goodwill, uncertain tax positions and pension obligations. Amounts ultimately realized could differ from those estimates.

New Accounting Pronouncements, Policy [Policy Text Block]

Recently Adopted Accounting Standards:

The Company adopted ASU

No.

2017

07,

Compensation-Retirement Benefits (Topic

715

) in

FY19:

Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (NPBC). This update requires that an employer disaggregate the service cost component from the other components of NPBC. In addition, only the service cost component will be eligible for capitalization. The amendments in this update are required to be applied retrospectively for the presentation of the service cost component and the other components of NPBC in the Consolidated Statement of Operations and prospectively, on and after the adoption date, for the capitalization of the service cost component of NPBC in assets. As required by the transition provisions of this update, the following table shows the impact of the adoption on the respective line items in the Consolidated Statement of Operations for fiscal years

2020

and

2019

and the reclassifications to the fiscal year

2018

Consolidated Statement of Operations to retroactively apply classification of the service cost component and the other components of NPBC:

(Dollars in Thousands)	Increase (Decrease) to Net Income
	FY 2020			FY 2019			FY 2018
Cost of goods sold decrease	$	12,790		$	710		$	582
Selling, general and administrative expense decrease		3,963			220			212
Other income (expense) net		(16,753	)		(930	)		(794	)
	$	-		$	-		$	-

The Company adopted Accounting Standards Codification

842,

Leases ("ASC

842"

)

July 1, 2019.

As a result, the Company updated its significant accounting policies for leases. Refer to Note

"Leases" to the Consolidate Financial Statements for additional information related to the Company's lease arrangements and the impact of the adoption of ASC

842.

months. Minimum lease payments include only the fixed lease component of the agreement.

The Company estimates its incremental borrowing rate for its leases using a portfolio approach based on the respective weighted average term of the agreements. The estimation considers the market rates of the Company's outstanding borrowings and rates of external outstanding borrowings including market comparisons. Operating lease expense is recognized on a straight-line basis over the lease term and is included in cost of goods sold and sales, general and administrative expenses.

The Company adopted the standard beginning this fiscal year. The Company has elected the practical expedient to account for each separate lease component of a contract and its associated non-lease components as a single lease component, thus causing all fixed payments to be capitalized. The Company also elected the package of practical expedients permitted within the new standard, which among other things, allows the Company to carry forward historical lease classification. Variable lease payment amounts that cannot be determined at the commencement of the lease such as increases in lease payments based on changes in index rates or usage, are

not

included in the ROU assets or operating lease liabilities. These are expensed as incurred and recorded as variable lease expense. The Company determines if an arrangement is a lease at the inception of a contract. Operating lease ROU assets and operating lease liabilities are stated separately in the Consolidated Balance Sheet.

In preparation for adoption of the standard, the Company has implemented internal controls such as updated accounting policies and expanded data gathering procedures to comply with the additional disclosure requirements. The adoption had a material impact on the Company's Consolidated Balance Sheets, but did

not

have a material impact on our Consolidated Statements of Operations or Consolidated Statements of Cash Flows.

January 2017,

the FASB issued ASU

No.

2017

04,

"Intangibles-Goodwill and Other (Topic

350

): Simplifying the Test for Goodwill Impairment." Under the new guidance, if a reporting unit's carrying value amount exceeds its fair value, an entity will record an impairment charge based on that difference. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. The standard eliminates the requirement to calculate goodwill impairment using Step

which calculates any impairment charge by comparing the implied fair value of goodwill with its carrying amount. The standard does

not

change the guidance on completing Step

of the goodwill impairment test. The amendments in this ASU are effective for annual and interim periods beginning after

December 15, 2019

and should be applied prospectively for annual and any interim goodwill impairment tests. The Company adopted this guidance in fiscal year

2020.

February 2018,

the FASB issued ASU

No.

2018

02,

“Income Statement – Reporting Comprehensive Income (Topic

220

): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income”. For deferred tax items recognized in Accumulated Other Comprehensive Income (AOCI), changes in tax rates can leave amounts “stranded” in AOCI. Under ASU

2018

02,

FASB has given companies an option to reclassify the stranded tax effects resulting from the tax law and tax rate changes under the Tax Cuts and Jobs Act of

2017

from AOCI to retained earnings. This guidance is effective for fiscal years beginning after

December 15, 2018

and requires companies to disclose whether they are or are

not

opting to reclassify the income tax effects from the new

2017

tax act. The adoption of this standard did

not

have a material impact on the Company's financial position and results of operations upon adoption

August 2018,

the FASB issued ASU

No.

2018

13,

"Fair Value Measurement ('Topic

820'

): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement." The ASU modifies the disclosure requirements in Topic

820,

Fair Value Measurement, by removing certain disclosure requirements related to the fair value hierarchy, modifying existing disclosure requirements related to measurement uncertainty and adding new disclosure requirements, such as disclosing the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level

fair value measurements held at the end of the reporting period and disclosing the range and weighted average of significant unobservable inputs used to develop Level

fair value measurements. This ASU is effective for public companies for annual reporting periods and interim periods within those annual periods beginning after

December 15, 2019.

The adoption of this standard did

not

have a material impact on the Company's financial position and results of operations upon adoption

Recently Issued Accounting Standards

not

yet Adopted:

June 2016,

the FASB issued ASU

2016

13,

“Financial Instruments - Credit Losses (Topic

326

): Measurement of Credit Losses on Financial Instruments,” and subsequent amendment to the guidance, ASU

2018

November 2018.

The standard significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are

not

measured at fair value through net income. The standard will replace today's “incurred loss” approach with an “expected loss” model for instruments measured at amortized cost. The amendment will affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets

not

excluded from the scope that have the contractual right to receive cash. ASU

2018

clarifies that receivables arising from operating leases are accounted for using lease guidance and

not

as financial instruments. The amendments should be applied on either a prospective transition or modified-retrospective approach depending on the subtopic. This ASU is effective for annual periods beginning after

December 15, 2019,

and interim periods therein. Early adoption is permitted for annual periods beginning after

December 15, 2018,

and interim periods therein. The adoption of this standard did

not

have a material impact on the Company's financial position and results of operations upon adoption.

August 2018,

the FASB issued ASU

No.

2018

14,

"Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic

715

): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans." ASU

2018

removes certain disclosures that are

not

considered cost beneficial, clarifies certain required disclosures and added additional disclosures. This ASU is effective for public companies for annual reporting periods and interim periods within those annual periods beginning after

December 15, 2020.

The amendments in ASU

2018

must be applied on a retrospective basis. The Company is currently assessing the effect, if any, that ASU

2018

will have on its consolidated financial statements.