Quarterly report pursuant to Section 13 or 15(d)

Note 3 - Recent Accounting Pronouncements

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Note 3 - Recent Accounting Pronouncements
9 Months Ended
Mar. 31, 2019
Notes to Financial Statements  
New Accounting Pronouncements and Changes in Accounting Principles [Text Block]
(
3
)
Recent Accounting Pronouncements
 
As of
March 31, 2019,
we implemented all applicable new accounting standards and updates issued by the Financial Accounting Standards Board (“FASB”) that were in effect. There were
no
new standards or updates adopted during the
first
nine
months of fiscal
2019
that had a material impact on our consolidated financial statements.
 
New Accounting Standards or Updates Recently Adopted
 
Revenue Recognition -
In
May 
2014,
the FASB issued accounting standards update (“ASU”)
2014
-
09,
Revenue from Contracts with Customers
(Accounting Standards Codification Topic
606
(“ASC
606”
)), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The new standard supersedes virtually all existing authoritative accounting guidance on revenue recognition and requires additional disclosures and greater use of estimates and judgments. We adopted the new standard in the
first
quarter of fiscal
2019.
We reviewed substantially all of our contracts and revenue streams and determined that while the application of the new standard did
not
have a material change in the amount of or timing for recognizing revenue, it did impact our financial statement disclosures related to net sales and related accounts. See Note
4
for further details on these new disclosures.
 
Restricted Cash
- In
November 2016,
the FASB issued ASU
2016
-
18,
Statement of Cash Flows (Topic
230
): Restricted Cash
,
which is intended to reduce diversity in the presentation of restricted cash and restricted cash equivalents in the cash flow statement.  The statement requires that restricted cash and restricted cash equivalents be included as components of total cash and cash equivalents as presented on the statement of cash flows. The Company had
not
previously included restricted cash as a component of cash and cash equivalents as presented on its consolidated statement of cash flows. We adopted the new standard in the
first
quarter of fiscal
2019,
under the retrospective adoption method, and prior year restricted cash has been reclassified to conform to current year presentation. See Note
5
for further details.
 
Share-Based Payments
- In
May 2017,
the FASB issued ASU
2017
-
09,
Compensation – Stock Compensation (Topic
718
): Scope of Modification Accounting
,
which amended the scope of modification accounting for share-based payment arrangements. The guidance focused on changes to the terms or conditions of share-based payment awards that would require the application of modification accounting and specifies that an entity would
not
apply modification accounting if the fair value, vesting conditions and classification of the awards are the same immediately before and after the modification. We adopted ASU
2017
-
09
in the
first
quarter of fiscal
2019.
The adoption of this standard had
no
impact on our consolidated financial statements.
 
Recent Accounting Standards or Updates
Not
Yet Effective
 
Leases -
In
February 2016,
the FASB issued ASU
2016
-
02,
 
Leases (Topic
842
)
, an update related to accounting for leases. The standard introduces a lessee model that will require lessees to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases with terms of more than
twelve
months. Lessors will remain largely unchanged from current GAAP. In addition, ASU
2016
-
02
will require disclosures to help investors and other financial statement users better understand the amount, timing and uncertainty of cash flows arising from leases. The Company is required to adopt ASU
2016
-
02
in the
first
quarter of fiscal
2020
and expects to apply the modified retrospective approach, which allows for a cumulative-effect adjustment at the beginning of the period of adoption and does
not
require application of the guidance to comparative periods. We are currently evaluating the impact of this accounting standards update, which involves gathering lease data, reviewing our lease portfolio, implementing a
third
-party lease accounting software and completing an impact assessment with respect to the adoption of the provisions of the new standard. We currently expect the adoption to have a material impact to our consolidated balance sheet in order to recognize the right of use assets and related liabilities, including enhanced disclosures. However, we do
not
expect the adoption to have a material impact on our consolidated statements of comprehensive income or cash flows.
 
Goodwill Impairment Test
- In
January 2017,
the FASB issued ASU
2017
-
04,
Intangibles-Goodwill and Other (Topic
350
)
:
Simplifying the Test for Goodwill Impairment,
which removes the requirement for companies to compare the implied fair value of goodwill with its carrying amount as part of step
2
of the goodwill impairment test. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value,
not
to exceed the carrying amount of goodwill. This accounting standards update will be effective for us beginning in the
first
quarter of fiscal
2021
and we do
not
expect the adoption to have a material impact on our consolidated financial statements.
 
Implementation Costs in a Cloud Computing Arrangement
-
In
August 2018,
the FASB issued ASU
2018
-
15,
Cloud Computing Arrangements for Service Contracts
, an update related to a client’s accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. This guidance aligns the requirements for capitalizing implementation costs in a cloud computing service contract with the guidance for capitalizing implementation costs to develop or obtain internal-use software. Capitalized implementation costs will be expensed over the term of the arrangement. This accounting standards update will be effective for us beginning in the
first
quarter of fiscal
2021,
with early adoption permitted. We are currently evaluating the impact of this accounting standards update, but do
not
expect the adoption to have a material impact on our consolidated financial statements.
 
No
other new accounting pronouncements issued or effective as of
March 31, 2019
have had or are expected to have an impact on our consolidated financial statements.