In March 2016, the Financial Accounting Standards Board (the “FASB”) issued guidance to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The guidance is effective for fiscal years ending after December 15, 2016, with early adoption permitted. The Company is currently evaluating the impact of the adoption on its consolidated financial statements.

In February 2016, the FASB issued guidance which requires lessees to recognize on the balance sheet a right-of-use asset which represents a lessee’s right to use the underlying asset. Under the guidance, an entity will also recognize a lease liability which represents a lessee’s obligation to make lease payments for the right to use the asset. In addition, the standard requires expanded disclosures that are both qualitative and quantitative in nature. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years and requires a modified retrospective transition method. The Company is currently evaluating the impact of the adoption on its consolidated financial statements.

In November 2015, the FASB issued guidance which simplifies the presentation of deferred income taxes by eliminating the requirement that an entity separate deferred income tax assets and liabilities into current and noncurrent in a classified statement of financial position. Under this guidance, deferred tax assets and liabilities are required to be classified as noncurrent. The amendments are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted for all entities as of the beginning of an interim or annual reporting period. The Company prospectively adopted the accounting standard as of the beginning of the Company’s fourth quarter of 2015.

In July 2015, the FASB issued guidance that requires entities to measure inventory within the scope of the standard at the lower of cost or net realizable value. “Net realizable value” is defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. Early adoption is permitted. The Company does not plan to early adopt, and the Company does not expect that this guidance will have a material impact on its consolidated financial statements.

In April 2015, the FASB issued guidance clarifying that customers should determine whether a cloud computing arrangement includes the license of software by applying the same guidance cloud service providers used to make this determination. The new guidance also eliminates the prior requirement for customers to account for software licenses they acquire by analogizing to the guidance on leases. The guidance is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The Company prospectively adopted the accounting standard in the first quarter of 2016. The adoption of this guidance had no material impact on the Company’s consolidated financial statements.

In August 2014, the FASB issued guidance which requires management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide disclosure in the footnotes under certain circumstances. This guidance is effective for fiscal years ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016, with early adoption permitted. The Company does not plan to early adopt, and the Company does not expect that this guidance will have a material impact on its consolidated financial statements.

 

In May 2014, the FASB issued guidance to provide a single, comprehensive revenue recognition model for all contracts with customers. The new revenue recognition model supersedes existing revenue recognition guidance and requires revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration an entity expects to receive in exchange for those goods or services. This guidance is effective for fiscal years and interim periods with those years beginning after December 15, 2017, and early adoption is permitted. The guidance permits the use of either a full or modified retrospective or cumulative effect transition method. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.