Note 2 - Recent Accounting Pronouncements and Accounting Changes

9 Months Ended

Dec. 31, 2016

Notes to Financial Statements

New Accounting Pronouncements and Changes in Accounting Principles [Text Block]

2.

Recent Accounting Pronouncements and Accounting Changes

In

May

2014,

Financial Accounting Standards Board, or FASB, issued a new standard on the recognition of revenue from contracts with customers, which includes a single set of rules and criteria for revenue recognition to be used across all industries. The revenue standard’s core principle is built on the contract between a vendor and a customer for the provision of goods and services. It attempts to depict the exchange of rights and obligations between the parties in the pattern of revenue recognition based on the consideration to which the vendor is entitled. To accomplish this objective, the standard requires

five

basic steps: 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 entity satisfies a performance obligation. For public companies, this standard is effective for annual reporting periods beginning after

December

 

15,

2017,

including interim periods during the annual period. Early adoption is permitted for annual periods commencing after

December

15,

2016.

Two d

ifferent transition methods are available:

full retrospective method and a modified retrospective

approach. We are currently evaluating the impact of the adoption of the standard on our consolidated financial statements including selection of the transition method.

In

July

2015,

FASB issued an amendment to modify the inventory measurement guidance in Topic

330,

Inventory

, for inventory that is measured using the methods other than last-in,

first

-out, or LIFO, and the retail inventory method. It requires that an entity measure inventory within the scope of this update at the lower of cost and net realizable value. It eliminated the guidance in Topic

330

that required a reporting entity measuring inventory at the lower of cost or market to consider the replacement cost of inventory and the net realizable value of inventory less an approximately normal profit margin along with net realizable value in determining the market value. The guidance will be effective for annual reporting periods beginning after

December

 

15,

2016,

and interim periods during the annual period. The new standard is required to be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. We do not expect this change to have a significant impact on our consolidated financial statements.

In

January

2016,

FASB issued authoritative guidance that modifies how entities measure equity investments and present changes in the fair value of financial liabilities. Under the new guidance, entities will have to measure equity investments that do not result in consolidation and are not accounted under the equity method at fair value and recognize any changes in fair value in net income unless the investments qualify for the new practicality exception. A practicality exception will apply to those equity investments that do not have a readily determinable fair value and do not qualify for the practical expedient to estimate fair value under Accounting Standards Codification,

Fair Value Measurements

, or ASC

820,

and as such these investments

may

be measured at cost. This guidance is effective for financial statements issued for fiscal years beginning after

December

15,

2017,

and interim periods within those fiscal years. We are currently evaluating the impact of this standard on our consolidated financial statements.

In

February

2016,

FASB issued amended guidance for lease arrangements, which requires lessees to recognize the following

for all leases with terms longer than

12

months: a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The amendment is effective for financial statements issued for fiscal years beginning after

December

 

15,

2018,

and interim periods within those fiscal years. Early adoption is permitted.

We are currently evaluating the impact of this amended guidance on our consolidated financial statements.

In

March

2016,

FASB issued amended guidance to simplify the transition to the equity method of accounting. This standard eliminates the requirement that when an existing cost method investment qualifies for use of the equity method, an investor must restate its historical financial statements as if the equity method had been used during all previous periods. Additionally, any unrealized gain or loss in accumulated other comprehensive income (loss) will be recognized through earnings at the point an investment qualifies for the equity method. The amended guidance is effective for financial statements issued for

fiscal years, and interim periods within those fiscal years, beginning after

December

15,

2016.

It should be applied prospectively. Early adoption

is permitted. We are currently evaluating the impact of

this amended guidance on our consolidated financial statements.

In

March

2016,

FASB issued amended guidance which simplifies several aspects of the accounting for

employee share-based payment awards, including

forfeitures, employer tax withholding on share-based compensation and excess tax benefits or deficiencies.

The amended guidance also clarifies the statement of cash flows presentation for share-based awards. The guidance is effective for financial statements issued for fiscal years beginning after

December

15,

2016,

and interim periods within those fiscal years. Early adoption is permitted in any interim or annual period for which financial statements have not yet been issued or have not been made available for issuance.

We are currently evaluating the impact of this amended guidance on our consolidated financial statements.

In

October

2016,

FASB issued amended guidance which requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. This eliminates the current exception for all intra-entity transfers of an asset other than inventory that requires deferral of the tax effects until the asset is sold to a

third

party or otherwise recovered through use. The guidance will be effective for the Company for fiscal years beginning after

December

15,

2017,

including interim reporting periods within those annual reporting periods. Early adoption is permitted in the

first

interim period only. The amendments should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption.

 We are in the process of evaluating the impacts of the adoption of this amendment.

In

November

2016,

FASB issued amended guidance which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and restricted cash. Therefore, restricted cash should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The guidance is effective for fiscal years beginning after

December

15,

2017,

and interim periods within those fiscal years, and will be applied on a retrospective basis. We have adopted the guidance on a retrospective basis from the quarter ended

December

31,

2016.

In our unaudited condensed consolidated statements of cash flow statements for the

nine

month periods ended

December

31,

2016

and

2015,

the beginning balances of cash and cash equivalents included restricted cash of

$277,000

and

$266,000

in the respective periods and the ending balances of cash and cash equivalents included restricted cash of

$1.3

million and

$722,000

in the respective periods. If we had not adopted the amended guidance, our unaudited condensed consolidated statements of cash flows for the

nine

month periods ended

December

31,

2016

and

2015

would have shown a decrease of

$1.0

million and

$357,000,

respectively, in the change in restricted cash under cash flows from investing activities.