XML 29 R19.htm IDEA: XBRL DOCUMENT v3.19.2
Significant Accounting Policies (Policies)
6 Months Ended
Jun. 30, 2019
Accounting Policies [Abstract]  
Basis of Accounting, Policy [Policy Text Block]
a) Basis of presentation
 
The condensed consolidated financial statements include the accounts of Superior Group of Companies, Inc. and its wholly-owned subsidiaries, The Office Gurus, LLC, SUG Holding, Superior Group Holdings, Inc., Fashion Seal Corporation, BAMKO, LLC and CID Resources, Inc.; The Office Gurus, Ltda, de C.V., The Office Masters, Ltda., de C.V. and The Office Gurus, Ltd., each a subsidiary of Fashion Seal Corporation and SUG Holding; and Power Three Web, Ltda. and Superior Sourcing, each a wholly-owned subsidiary of SUG Holding; BAMKO Importação, Exportação e Comércio de Brindes Ltda., a subsidiary of BAMKO, LLC and SUG Holding; Guangzhou Ben Gao Trading Limited, Worldwide Sourcing Solutions Limited, and BAMKO UK, Limited,
each a direct or indirect subsidiary of BAMKO, LLC; and BAMKO India Private Limited, a
99%
-owned subsidiary of BAMKO, LLC.  All of these entities are referred to collectively as “the Company”, “Superior”, “we”, “our”, or “us”. Effective on
May 3, 2018,
Superior Uniform Group, Inc. changed its name to Superior Group of Companies, Inc.
 
The accompanying unaudited financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. Intercompany items have been eliminated in consolidation. These condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form
10
-K for the year ended
December 31, 2018,
and filed with the Securities and Exchange Commission.  The interim financial information contained herein is
not
certified or audited; it reflects all adjustments (consisting of only normal recurring accruals) which are, in the opinion of management, necessary for a fair statement of the operating results for the periods presented, stated on a basis consistent with that of the audited financial statements.  The results of operations for any interim period are
not
necessarily indicative of results to be expected for the full year.
 
We refer to the condensed consolidated financial statements collectively as “financial statements,” and individually as “statements of comprehensive income (loss)”, “balance sheets”, “statements of stockholders’ equity”, and “statements of cash flows” herein.
New Accounting Pronouncements, Policy [Policy Text Block]
b) Recent Accounting Pronouncements
 
We consider the applicability and impact of all Accounting Standard Updates (“ASUs”). ASUs
not
listed below were assessed and determined to be
not
applicable.
 
Recently Adopted Accounting Pronouncements
 
In
February 2016,
the Financial Accounting Standards Board (“FASB”) issued ASU
2016
-
02,
Lea
s
es (Topic
842
)
and
July 2018,
the FASB issued ASU
2018
-
10,
Codification Improvements to Topic
842,
Leases
and ASU
2018
-
11,
Targeted Improvements
(collectively “Topic
842”
). Topic
842
establishes a new lease model, referred to as the right-of-use (ROU) model that brings substantially all leases onto the balance sheet. This standard requires lessees to recognize leased assets (ROU Assets) and lease liabilities on the balance sheet and disclose key information about the leasing arrangements in their financial statements. Leases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The Company adopted Topic
842
effective on
January 1, 2019
using the modified retrospective transition approach that allows a reporting entity to use the effective date as its date of initial application and
not
restate the comparative periods in the period of adoption when transitioning to the new standard. Consequently, the requisite financial information and disclosures under the new standard are excluded for dates and periods prior to
January 1, 2019.
In addition, the Company elected to use a number of optional simplification and practical expedients (reliefs) permitted under the transition guidance within the new standard, including allowing the Company to combine fixed lease and non-lease components, apply the short-term lease exception to all leases of
one
year or less, and utilize the ‘package of practical expedients’, which permits the Company to
not
reassess prior accounting conclusions with respect to lease identification, lease classification and initial direct costs under Topic
842.
The Company did
not
elect the use-of hindsight or the practical expedient pertaining to land easement; the latter
not
being applicable to the Company. Adoption of this new standard resulted in the recognition of
$4.1
million of operating lease liabilities (
$1.0
million in other current liabilities and
$3.1
million in long-term operating lease liabilities) which represents the present value of the remaining lease payments of
$4.6
million, discounted using the Company’s lease discount rate of
5.74%
and
$4.9
million of operating lease right-of-use assets, which represents the lease liability of
$4.1
million adjusted for prepaid rent to
$0.8
million that was previously presented within current prepaid expenses and other current assets and other assets on the accompanying balance sheet prior to adoption. Refer to Note
10
for the impact to the financial statements as of
June 30, 2019.
 
In
February 2018,
the FASB issued ASU
2018
-
02,
Income Statement - Reporting Comprehensive Income (Topic
220
): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.
ASU
2018
-
02
allows entities to elect to reclassify the income tax effects resulting from the Tax Cuts and Jobs Act (Tax Act) on items within accumulated other comprehensive income to retained earnings and requires additional related disclosures. This standard is effective for fiscal years beginning after
December 15, 2018
and interim periods within those fiscal years, however, early adoption is permitted. The Company elected
not
to reclassify the income tax effects of the Tax Act from accumulated other comprehensive income to retained earnings. The Company’s adoption of this standard on
January 1, 2019
did
not
have a material impact on its financial statements.
 
Recently Issued Accounting Pronouncements
Not
Yet Adopted
 
In
June 2016,
the FASB issued ASU
2016
-
13,
Financial Instruments—Credit Losses (Topic
326
).
The update changes the impairment model for most financial assets and certain other instruments, including trade and other receivables, held-to-maturity debt securities and loans, and requires entities to use a new forward-looking expected loss model that will result in the earlier recognition of allowance for losses. This update is effective for annual and interim periods beginning after
December 15, 2019,
with early adoption permitted. Adoption will require a modified retrospective approach beginning with the earliest period presented. The Company is currently evaluating the potential impact this standard will have on its financial statements.
 
In
January 2017,
the FASB issued ASU
2017
-
04,
“Simplifying the Test for Goodwill Impairment.”
ASU
2017
-
04
eliminates the
two
-step process that required identification of potential impairment and a separate measure of the actual impairment. Goodwill impairment charges, if any, would be determined by the difference between a reporting unit's carrying value and its fair value (impairment loss is limited to the carrying value). This standard is effective for annual or any interim goodwill impairment tests beginning after
December 15, 2019.
The Company’s adoption of this standard is
not
expected to have a material impact on its financial statements.