Recent Accounting Standards

9 Months Ended

Sep. 30, 2019

Recent Accounting Standards [Abstract]

2. Recent Accounting Standards

Recently Issued Accounting Standards

In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract”, which clarifies the accounting for implementation costs in cloud computing arrangements. ASU 2018-15 is effective for us in the first quarter of fiscal 2020. We do not expect a material impact on our consolidated statement of income and are still assessing the impact on our consolidated balance sheet.

We reviewed all other recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact on the condensed consolidated financial statements.

Recently Adopted Accounting Standards

On January 1, 2019, we adopted ASU 2016-02, “Leases (Topic 842),” along with related clarifications and improvements. This pronouncement requires lessees to recognize a liability for lease obligations, which represents the discounted obligation to make future lease payments, and a corresponding right-of-use asset on the balance sheet. The guidance requires disclosure of key information about leasing arrangements that is intended to give financial statement users the ability to assess the amount, timing, and potential uncertainty of cash flows related to leases. We elected the optional transition method to apply the standard as of the effective date and therefore, we have not applied the standard to the comparative periods presented on our condensed consolidated financial statements.

Our practical expedients were as follows:



		Implications as of January 1, 2019
Practical expedient package		We have not reassessed whether any expired or existing contracts are, or contain, leases.
		We have not reassessed the lease classification for any expired or existing leases.
		We have not reassessed initial direct costs for any expired or existing leases.
Hindsight practical expedient		We have not elected the hindsight practical expedient, which permits the use of hindsight when determining lease term and impairment of operating lease assets.

The impact on the consolidated balance sheet is as follows:



	December 31, 2018		Adjustments Due to the Adoption of Topic 842		January 1, 2019
Assets
Current assets:
Cash and cash equivalents	$	249,953	$	-	$	249,953
Accounts receivable		62,312		-		62,312
Inventory		21,555		-		21,555
Prepaid expenses and other current assets		54,129		(23,653)		30,476
Investments		426,845		-		426,845
Total current assets		814,794		(23,653)		791,141
Leasehold improvements, property and equipment, net		1,379,254		(15,167)		1,364,087
Restricted cash		30,199		-		30,199
Operating lease assets		-		2,363,020		2,363,020
Other assets		19,332		-		19,332
Goodwill		21,939		-		21,939
Total assets	$	2,265,518	$	2,324,200	$	4,589,718
Liabilities and shareholders' equity
Current liabilities:
Accounts payable	$	113,071	$	-	$	113,071
Accrued payroll and benefits		113,467		-		113,467
Accrued liabilities		147,849		(23,860)		123,989
Unearned revenue		70,474		-		70,474
Income tax payable		5,129		-		5,129
Total current liabilities		449,990		(23,860)		426,130
Commitments and contingencies
Deferred rent		330,985		(330,985)		-
Current and long-term operating lease liabilities		-		2,682,203		2,682,203
Deferred income tax liabilities		11,566		(831)		10,735
Other liabilities		31,638		-		31,638
Total liabilities		824,179		2,326,527		3,150,706
Shareholders' equity:
Preferred stock, $0.01 par value, 600,000 shares authorized, no shares issued as of December 31, 2018 and 2017, respectively		-		-		-
Common stock, $0.01 par value, 230,000 shares authorized, 35,973 and 35,852 shares issued as of December 31, 2018 and 2017, respectively		360		-		360
Additional paid-in capital		1,374,154		-		1,374,154
Treasury stock, at cost, 8,276 and 7,826 common shares at December 31, 2018 and 2017, respectively		(2,500,556)		-		(2,500,556)
Accumulated other comprehensive loss		(6,236)		-		(6,236)
Retained earnings		2,573,617		(2,327)		2,571,290
Total shareholders' equity		1,441,339		(2,327)		1,439,012
Total liabilities and shareholders' equity	$	2,265,518	$	2,324,200	$	4,589,718