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Note 27 - Impact of Recently Issued Accounting Standards | 12 Months Ended
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Dec. 31, 2019
Notes to Financial Statements |
Description of New Accounting Pronouncements Not yet Adopted [Text Block] |
27. |  | Impact of recently issued accounting standards
Recently adopted accounting guidance Leases The Financial Accounting Standards Board (“FASB”) has issued two Accounting Standards Updates (“ASU”) related to leases (collectively, “ASC 842” ). In February 2016, the FASB issued ASU No. 2016 - 02, Leases . This ASU affects all aspects of lease accounting and has a significant impact to lessees as it requires the recognition of a right-of use asset and a lease liability for virtually all leases including operating leases. In addition to balance sheet recognition, additional quantitative and qualitative disclosures is required. In July 2018, the FASB issued ASU No. 2018 - 11, Codification Improvements to Topic 842, Leases . This ASU affects narrow aspects of the guidance issued in ASU 2016 - 02 providing an additional (and optional) alternative transition method to adopt the new leases standard. Under this transition method, an entity initially applies ASC 842 at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company has adopted ASC 842 effective January 1, 2019, with the election of the new optional transition method offered under ASU 2018 - 11 to apply the new lease standard at the adoption date without restating comparative figures. Therefore, the comparative information has not been restated and continues to be reported under previous GAAP. In transitioning to ASC 842, the Company has also elected to apply the practical expedient package which permits the Company to (i) not reassess whether expired or existing contracts are or contain leases, (ii) not reassess the lease classification between operating and finance leases for any expired or existing leases and (iii) not reassess initial direct costs for any existing leases. The most significant impact is the increase in operating lease right-of-use assets and operating lease liabilities. A summary of the adjustments to the Company’s consolidated balance sheet as at adoption on January 1, 2019 were as follows:
|  | December 31, 2018 |  |  | ASC 842 adjustment |  |  | January 1, 2019 |
Balance sheet |  |  |  |  |  |  |  |  |  |  |  |
Accounts receivable, net of allowance |  | $ | 455,232 |  |  | $ | 1,174 |  |  | $ | 456,406 |
Prepaid expenses and other current assets |  |  | 62,474 |  |  |  | (1,477 | ) |  |  | 60,997 |
Operating lease right-of-use assets |  |  | - |  |  |  | 274,696 |  |  |  | 274,696 |
Accounts payable and accrued expenses |  |  | 251,375 |  |  |  | (6,177 | ) |  |  | 245,198 |
Operating lease liabilities (current) |  |  |  |  |  |  | 59,831 |  |  |  | 59,831 |
Deferred rent |  |  | 27,137 |  |  |  | (27,137 | ) |  |  | - |
Operating lease liabilities (non-current) |  |  | - |  |  |  | 247,876 |  |  |  | 247,876 |
Related balance sheet ratios were also impacted; however, covenant ratio calculations under the Company’s Revolving Credit Facility and Senior Notes were not impacted, as the underlying debt agreements contain provisions that nullify the impact of changes in accounting standards. See notes 2 and 8s for further details on leases. Hedging activities In August 2017, the FASB issued ASU No. 2017 - 12, Derivatives and Hedging (Topic 815 ): Targeted Improvements to Accounting for Hedging Activities, which increases the scope of hedge accounting for both financial and nonfinancial strategies. The Company adopted the new standard effective January 1, 2019 with no material impact on the Financial Statements. The Company’s interest rate swaps are accounted for as cash flow hedges, are deemed to be effective as hedges and are reported in other comprehensive income. Tax effects from Accumulated Other Comprehensive Income In February 2018, the FASB issued ASU No. 2018 - 02, Income Statement – Reporting Comprehensive Income (Topic 220 ): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . This ASU provides an option to reclassify stranded tax effects within accumulated other comprehensive income to retained earnings in each period in which the effect of the change in the US federal corporate income tax rate (or portion thereof) is recorded. The Company adopted the new standard effective January 1, 2019 with no material impact on the Financial Statements. Recently issued accounting guidance, not yet adopted In June 2016, the FASB issued ASU No. 2016 - 13, Financial Instruments – Credit Losses . This ASU creates a new framework to evaluate financial instruments, such as trade receivables, for expected credit losses. This new framework replaces the existing incurred loss approach and is expected to result in more timely recognition of credit losses. The standard is effective for annual and interim periods beginning after December 15, 2019. The Company has identified the financial assets within the scope of this ASU. Although the adoption is not expected to have a material impact on the financial statements, it is expected to impact the Company’s methodology of reserving for Accounts receivable and other receivable-related financial assets, including contract assets. In January 2017, the FASB issued ASU No. 2017 - 04, Intangibles – Goodwill and Other: Simplifying the Accounting for Goodwill Impairment to remove Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. Under this guidance, 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. The standard is effective for annual and interim periods beginning after December 15, 2019. The Company will adopt the ASU for the year beginning January 1, 2020. Adoption of the ASU will simplify the goodwill impairment testing process for the Company. In August 2018, the FASB issued ASU No. 2018 - 15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350 - 40 ). This ASU aligns the capitalizing of implementation costs incurred in relation to a hosting arrangement with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. It also requires these capitalized costs to be expensed over the term of the hosting arrangement and to the same line as the hosting arrangement. The standard is effective for annual and interim periods beginning after December 15, 2019 but where early adoption is permitted. As this ASU clarifies the previously existing ambiguity related to capitalization, it was determined that the guidance under the ASU is consistent with the Company’s existing capitalization process for development costs as relate to hosting arrangements and will not have any impact on the financial statements.

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