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Summary of Significant Accounting Policies and Basis of Presentation | 6 Months Ended
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Jun. 30, 2019
Accounting Policies [Abstract] |
Summary of Significant Accounting Policies and Basis of Presentation | Note 2 – Summary of Significant Accounting Policies and Basis of Presentation Accounting Principles Our unaudited consolidated condensed financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in the audited annual consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States of America have been condensed or omitted pursuant to those rules and regulations. In the opinion of management, all adjustments, consisting of normal recurring items, considered necessary for a fair presentation of our results of operations, financial position and cash flows have been included. The balance sheet as of December 31, 2018 was derived from audited annual consolidated financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. Certain reclassifications of prior year’s amounts have been made to conform with the current year’s presentation. Notably, $2,621 and $5,318 in customer relationship amortization was reclassified from product revenues to selling, general and administrative expenses for the three- and six-month periods ended June 30, 2018, respectively. Operating results for the six-month period ended June 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. These consolidated condensed financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2018. Consolidation The consolidated condensed financial statements at June 30, 2019 and December 31, 2018 and for the six-month periods ended June 30, 2019 and 2018, reflect the consolidated financial position, the consolidated operating results and the consolidated cash flows of the Company. Investments in affiliates in which Gentherm would not have control, but would have the ability to exercise significant influence over operating and financial policies, would be accounted for under the equity method. All other equity investments are measured at cost, less impairment, with changes in fair value recognized in net income. Use of Estimates The presentation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Actual results could differ from those estimates and assumptions. Note 2 – Summary of Significant Accounting Policies and Basis of Presentation – Continued Cash, cash equivalents and restricted cash The Company has cash that is legally restricted as to use or withdrawal. A reconciliation of cash and cash equivalents on the consolidated condensed balance sheets to cash, cash equivalents and restricted cash presented on the consolidated condensed statements of cash flows is as follows:
Year |  | June 30, 2019 |  |  | December 31, 2018 |  |  | June 30, 2018 |  |  | December 31, 2017 |
Cash and cash equivalents presented in the consolidated condensed balance sheets |  | $ | 33,677 |  |  | $ | 39,620 |  |  | $ | 65,357 |  |  | $ | 103,172 |
Restricted cash |  |  | 2,504 |  |  |  | — |  |  |  | — |  |  |  | — |
Cash, cash equivalents and restricted cash presented in the consolidated condensed statements of cash flows |  | $ | 36,181 |  |  | $ | 39,620 |  |  | $ | 65,357 |  |  | $ | 103,172 |
Leases The Company determines whether a contractual arrangement is or contains a lease at inception. Leases that are operating in nature are recognized in operating lease right-of-use assets, accrued liabilities and non-current lease liabilities on our consolidated condensed balance sheets. While Gentherm is not currently party to any leases that qualify as financing leases, right-of-use assets and liabilities recognized from financing leases would be presented separately from the right-of-use assets and liabilities recognized from operating leases on our consolidated condensed balance sheet. Lease liabilities are measured initially at the present value of the sum of the future minimum rental payments at the commencement date of the lease. Lease payments that will vary in the future due to changes in facts and circumstances are excluded from the calculation of rental payments, unless those variable payments are based on an index or rate. Rental payments are discounted using an incremental borrowing rate based on the Company’s credit rating, determined on a fully collateralized loan basis from information available at commencement date, and the duration of the lease term (the “reference rate”). Judgement is used to assess the importance of risk factor inputs during the computation of the Company’s credit rating. For significant leases at foreign subsidiaries denominated in U.S. Dollars, a risk premium associated with the borrower subsidiary’s country is added to the reference rate. For significant leases at foreign subsidiaries denominated in a foreign currency, the U.S. Dollar risk free rate with a duration similar to that of the lease term is subtracted from the reference rate and a corresponding foreign currency risk free rate with a duration similar to that of the lease term is added to the reference rate. Judgement is used to determine whether foreign subsidiary leases are significant. Operating lease right-of-use assets are measured at the amount of the lease liability, adjusted for prepaid or accrued lease payments, lease incentive received, and initial direct costs incurred, as applicable. Periods covered by an option to extend the lease are initially included in the measurement of an operating lease right-of-use asset and lease liability only when it is reasonably certain we will exercise the option. Gentherm’s lease agreements do not contain residual value guarantees or impose restrictions or covenants on the Company. For all classes of underlying assets, the Company accounts for leases that contain separate lease and nonlease components as containing a single lease component. The Company does not recognize lease right-of-use assets and lease liabilities from leases with an original lease term of 12 months or less and, instead, recognizes rent payments on a straight-line basis over the lease term in the Company’s consolidated condensed statement of income. See Note 11 to our consolidated condensed financial statements for description of the changes made to our accounting policy for leases that resulted from the adoption of a new lease standard. Impairments of Goodwill and Other Intangible Assets Whenever events or changes in circumstances indicate that it is more likely than not that a reporting unit’s fair value is less than it’s carrying amount, the Company then compares the fair value of the reporting unit to the related net book value. If the net book value of a reporting unit exceeds its fair value, an impairment loss is measured and recognized. The fair value of a reporting unit is estimated by analyzing internal inputs (level 3) to calculate forward values and discounting those values to the present value. Note 2 – Summary of Significant Accounting Policies and Basis of Presentation – Continued There were no events or changes in circumstances which would indicate goodwill or other intangibles were impaired during the six-months ended June 30, 2019. A rolled forward reconciliation of goodwill from December 31, 2018 to June 30, 2019 is as follows:
Six Months Ended June 30, 2019 |  |  |
Balance, beginning of period | $ | 55,311 |
Stihler acquisition |  | 9,816 |
Currency impact |  | (13) |
Balance, end of period | $ | 65,114 |
Assets and Liabilities Held for Sale The Company classifies assets and liabilities (disposal group) to be sold as held for sale in the period in which all of the following criteria are met: management, having the authority to approve the action, commits to a plan to sell the disposal group; the disposal group is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such disposal groups; an active program to locate a buyer and other actions required to complete the plan to sell the disposal group have been initiated; the sale of the disposal group is probable, and transfer of the disposal group is expected to qualify as a completed sale within one year, except if events or circumstances beyond the Company’s control extend the period of time required to sell the disposal group beyond one year; the disposal group is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. The Company initially measures a disposal group that is classified as held for sale at the lower of its carrying value or fair value less cost to sell. A loss resulting from this initial measurement is recognized in the period in which the held for sale criteria are met. The Company assesses the fair value of a disposal group, less cost to sell, each reporting period it remains classified as held for sale and reports any subsequent changes in the disposal group’s fair value less cost to sell (increase or decrease) as an adjustment to the disposal group’s carrying amount. Subsequent increases in fair value less cost to sell are recognized, but not in excess of the carrying amount of the disposal group at the time it was initially classified as held for sale. The Company reports assets and liabilities of the disposal group in the line items assets held for sale and liabilities held for sale in the consolidated condensed balance sheets as of each period the disposal group meets the criteria to be classified as held for sale. See Note 13 to our consolidated condensed financial statements for information about the assets and liabilities classified as held for sale.

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- Definition The entire disclosure for the basis of presentation and significant accounting policies concepts. Basis of presentation describes the underlying basis used to prepare the financial statements (for example, US Generally Accepted Accounting Principles, Other Comprehensive Basis of Accounting, IFRS). Accounting policies describe all significant accounting policies of the reporting entity. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -URI http://asc.fasb.org/topic&trid=2122369 + Details
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