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New Accounting Standards | 12 Months Ended
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Dec. 31, 2017
Accounting Changes and Error Corrections [Abstract] |
New Accounting Standards | New Accounting Standards Adopted Accounting Standards In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. This standard makes several modifications to Topic 718, including the accounting for forfeitures, employer tax withholding on share-based compensation and income tax consequences, and clarifies the statement of cash flows presentation for certain components of share-based awards, all of which are intended to simplify various aspects of the accounting for share-based compensation. We adopted this standard as of January 1, 2017. Previously, differences in the tax deduction and book expense resulting from the exercise of employee stock options were recorded to "Additional paid-in capital" on the Consolidated Balance Sheet. Since then, we have recorded the excess benefits realized from stock compensation transactions as a component of income tax expense in the Consolidated Statement of Comprehensive Income. Additionally, we elected to recognize forfeiture expense as forfeitures occur, rather than estimating forfeitures based on historical data. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which clarifies how cash receipts and cash payments are classified in the statement of cash flows. We elected, as permitted by the standard, to early adopt ASU 2016-15, as of December 31, 2017. The adoption of this guidance did not impact our consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory, which removes the prohibition against immediate recognition of current and deferred income tax effects on intra-entity transfers of assets other than inventory. We elected to early adopt this standard as of January 1, 2017 and recorded a $3.2 million cumulative effect adjustment to the beginning balance of retained earnings on January 1, 2017, which resulted in a net impact of increasing deferred tax assets by $2.6 million and decreasing a deferred tax charge in other assets by $5.8 million related to a prior period intra-entity transfer of intellectual property. In January 2017, the FASB issued ASU 2017-04: Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This ASU simplifies the subsequent measurement of goodwill by removing Step 2 from the goodwill impairment test. We elected, as permitted by the standard, to early adopt ASU 2017-04 on a prospective basis as of December 31, 2017. The adoption of this guidance would only impact the measurement of a future goodwill impairment to the extent applicable. Accounting Standards Not yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes existing lease guidance. Under this ASU, we will be required to record right-of-use assets and corresponding lease liabilities on the balance sheet. Previously, there was no requirement to recognize an asset or liability on the balance sheet for an operating lease. The ASU also requires disclosure of key information about leasing arrangements. This guidance is effective beginning January 1, 2019. The new standard is required to be applied with a modified retrospective approach for each prior reporting period presented. We are in the preliminary phases of our implementation plan, which includes the identification of all lease contracts and an assessment of the effect of the ASU on our portfolio of leases. While this assessment continues, we have not yet determined the effect of the ASU on our results of operations, financial condition or cash flow presentation. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). Under this ASU and subsequently issued amendments, revenues are recognized at the time when goods or services are transferred to a customer in an amount that reflects the consideration it expects to receive in exchange for those goods or services. Companies may use either a full retrospective or a modified retrospective approach to adopt this ASU. We will adopt this standard using the modified retrospective method effective January 1, 2018. We generate the majority of our revenues from providing professional services under the following types of billing arrangements: time and expense, fixed fee and performance based. The impact of the ASU adoption for each type of billing arrangement is as follows: Time and expense - The Company will use the right-to-invoice practical expedient to account for time-and-expense billing arrangements when the Company has a right to consideration from a customer in an amount that corresponds directly with the value of the entity’s performance completed to date. This is consistent with the Company’s current revenue recognition policy. Fixed fee - The Company will recognize revenues as individual performance obligations are satisfied using a measure of progress that is based on the efforts or hours incurred as a percentage of total hours expected to be incurred (i.e., an input method measure of progress). This method is consistent with the Company’s current revenue recognition policy. However, the definition of a performance obligation under the new standard requires an evaluation of whether or not a good or service to a customer is distinct. This assessment of whether or not a single or multiple performance obligations exists within a contract may lead to a difference in the timing of revenue recognition compared with our current revenue recognition policy. Performance based or contingent - These arrangements include some form of variable consideration whereby the Company earns revenues if certain predefined outcomes occur in the future. When the related performance obligations are satisfied over time, the Company may recognize revenues in the proportion that the outcome has been earned based on services provided when the Company concludes that collection of the amount recorded is probable, i.e., a significant reversal will not occur in the future. The Company will evaluate probability using either the expected value method or the most likely amount method, as appropriate. Under the new standard, the Company may recognize revenues earlier than it previously did largely relative to certain types of contingent success fees where revenues were recorded upon cash collection. In addition, we believe this standard could affect the timing of revenue recognition for contracts that provide prospective volume-based discounts, time-and-expense billing arrangements with a cap on total fees, where we expect the cap to be exceeded, and other arrangements where a discount is provided, among others. The Company is in its final stages of quantifying the financial impacts of the new guidance based on the contracts that exist at the date of adoption, as well as evaluating presentation of our revenues and required enhancements to disclosures. We have implemented both process and information systems changes to identify and assess contracts that are impacted by the new revenue recognition criteria and accumulate data to satisfy new disclosure requirements. We expect that the new standard will have an immaterial impact on our consolidated financial statements, other than increased disclosures, upon adoption. Changes to revenue recognition as a result of applying the new standard will largely arise from certain contingent or success fee arrangements as described above.

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- Definition The entire disclosure of changes in accounting principles, including adoption of new accounting pronouncements, that describes the new methods, amount and effects on financial statement line items. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -URI http://asc.fasb.org/topic&trid=2122394 + Details
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