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Summary Of Significant Accounting Policies | 12 Months Ended
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Dec. 30, 2017
Summary Of Significant Accounting Policies [Abstract] |
Summary Of Significant Accounting Policies | NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ﻿ The Company ﻿ USANA Health Sciences, Inc. develops and manufactures high-quality nutritional and personal care products that are sold internationally through a global network marketing system, which is a form of direct selling. The Consolidated Financial Statements include the accounts and operations of USANA Health Sciences, Inc. and its wholly-owned subsidiaries (collectively, the “Company” or “USANA”) in two geographic regions: Asia Pacific, and Americas and Europe. Asia Pacific is further divided into three sub-regions: Greater China, Southeast Asia Pacific, and North Asia. Greater China includes Hong Kong, Taiwan and China; Southeast Asia Pacific includes Australia, New Zealand, Singapore, Malaysia, the Philippines, Thailand, and Indonesia; North Asia includes Japan, and South Korea. Americas and Europe includes the United States, Canada, Mexico, Colombia, the United Kingdom, France, Belgium, and the Netherlands. Principles of consolidation and basis of presentation ﻿ The accompanying Consolidated Financial Statements include the accounts and operations of USANA Health Sciences, Inc. and its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. The accounting and reporting policies of the Company conform with accounting principles generally accepted in the United States of America (“US GAAP”). Use of estimates ﻿ The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates for the Company relate to revenue recognition, inventory obsolescence, and income taxes. Actual results could differ from those estimates. These estimates may be adjusted as more current information becomes available, and any adjustment could be significant. ﻿ Fiscal year ﻿ The Company operates on a 52-53 week year, ending on the Saturday closest to December 31. Fiscal years 2015, 2016 and 2017, were 52-week years. Fiscal year 2015 covered the period January 4, 2015 to January 2, 2016 (hereinafter 2015). Fiscal year 2016 covered the period January 3, 2016 to December 31, 2016 (hereinafter 2016). Fiscal year 2017 covered the period January 1, 2017 to December 30, 2017 (hereinafter 2017). ﻿ Fair value measurements ﻿ The Company measures at fair value certain of its financial and non-financial assets and liabilities by using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price, based on the highest and best use of the asset or liability. The levels of the fair value hierarchy are: ﻿
| " |  | Level 1 inputs are quoted market prices in active markets for identical assets or liabilities that are accessible at the measurement date.
﻿
| " |  | Level 2 inputs are from other than quoted market prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.
﻿
| " |  | Level 3 inputs are unobservable and are used to measure fair value in situations where there is little, if any, market activity for the asset or liability at the measurement date.
﻿ As of December 31, 2016 and December 30, 2017, the following financial assets and liabilities were measured at fair value on a recurring basis using the type of inputs shown: NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
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﻿ |  |  |  |  |  |  |  |  |
﻿ |  |  |  | Fair Value Measurements Using |
﻿ |  |  |  | Inputs |
﻿ |  | December 31, 2016 |  | Level 1 |  | Level 2 |  | Level 3 |
﻿ |  |  |  |  |  |  |  |  |
﻿Money market funds included in cash equivalents |  | $ 27,917 |  | $ 27,917 |  | $ - |  | $ - |
﻿Foreign currency contracts included in prepaid expenses and other current assets |  | 4 |  | - |  | 4 |  | - |
﻿ |  |  |  |  |  |  |  |  |
﻿ |  | $ 27,921 |  | $ 27,917 |  | $ 4 |  | $ - |
﻿ |  |  |  |  |  |  |  |  |
﻿ |  |  |  | Fair Value Measurements Using |
﻿ |  |  |  | Inputs |
﻿ |  | December 30, 2017 |  | Level 1 |  | Level 2 |  | Level 3 |
﻿ |  |  |  |  |  |  |  |  |
﻿Money market funds included in cash equivalents |  | $ 106,090 |  | $ 106,090 |  | $ - |  | $ - |
﻿Foreign currency contracts included in other current liabilities |  | (139) |  | - |  | (139) |  | - |
﻿ |  |  |  |  |  |  |  |  |
﻿ |  | $ 105,951 |  | $ 106,090 |  | $ (139) |  | $ - |
﻿ |  |  |  |  |  |  |  |  |
﻿ There were no transfers of financial assets or liabilities between Level 1 and Level 2 inputs for the years ended 2016 and 2017. ﻿ The majority of the Company’s non-financial assets, which include goodwill, intangible assets, and property and equipment, are not required to be carried at fair value on a recurring basis. However, if certain triggering events occur (or tested at least annually for goodwill and indefinite-lived intangibles) such that a non-financial asset is required to be evaluated for impairment, an impairment charge is recorded to reduce the carrying value to the fair value, if the carrying value exceeds the fair value. For the years ended 2015, 2016, and 2017, there were no non-financial assets measured at fair value on a non-recurring basis. ﻿ Fair value of financial instruments ﻿ At December 31, 2016 and December 30, 2017, the Company’s financial instruments include cash equivalents, accounts receivable, restricted cash, notes receivable, and accounts payable. The recorded values of cash equivalents, accounts receivable, restricted cash, and accounts payable approximate their fair values, based on their short-term nature. Historically, the carrying value of the notes receivable approximated fair value because the variable interest rates in the notes reflected current market rates. During 2017, an impairment was recor ded on a note receivable based on the estimated recoverable amount using Level 3 inputs, which approximates fair value. NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED ﻿ Translation of foreign currencies ﻿ The functional currency of the Company’s foreign subsidiaries is the local currency of their country of domicile. Assets and liabilities of the foreign subsidiaries are translated into U.S. dollar amounts at month-end exchange rates. Revenue and expense accounts are translated at the weighted-average rates for the monthly accounting period to which they relate. Equity accounts are translated at historical rates. Foreign currency translation adjustments are accumulated as a component of other comprehensive income. Gains and losses from foreign currency transactions are included in the “Other, net” component of Other income (expense) in the Company’s consolidated statements of comprehensive income. ﻿ Cash and cash equivalents ﻿ The Company considers all highly liquid investments with an original maturity of three months or less from the date of purchase to be cash equivalents. Cash equivalents as of December 31, 2016 and December 30, 2017 consisted primarily of money market fund investments and amounts receivable from credit card processors. ﻿ Amounts receivable from credit card processors and other forms of electronic payment are considered cash equivalents because they are both short-term and highly liquid in nature and are typically converted to cash within three days of the sales transaction. Amounts receivable from credit card processors as of December 31, 2016 and December 30, 2017 totaled $11,659 and $11,517, respectively. ﻿ Restricted Cash ﻿ The Company is required to maintain cash deposits with banks in certain subsidiary locations for various operating purposes. The most significant of these cash deposits relates to a deposit held at a bank in China, the balance of which was $2,880 as of December 31, 2016, and $3,076 as of December 30, 2017. This deposit is required for the application of direct sales licenses by the Ministry of Commerce and the State Administration for Industry & Commerce of the People’s Republic of China, and will continue to be restricted during the periods while the Company holds these licenses. Restricted cash is included in the “Other assets” line item in the Company’s consolidated balance sheets. ﻿ Inventories ﻿ Inventories are stated at the lower of cost or net realizable value. Cost is determined using a standard costing system which approximates the first-in, first-out method. The components of inventory cost include raw materials, labor, and overhead. Net realizable value is determined using various assumptions with regard to excess or slow-moving inventories, non-conforming inventories, expiration dates, current and future product demand, production planning, and market conditions. A change in any of these variables could result in an adjustment to inventory. ﻿ Accounts Receivable ﻿ Accounts receivable are recorded at the invoiced amount and do not bear interest. The Company maintains an allowance for doubtful accounts for estimated losses inherent in its accounts receivable portfolio. In establishing the required allowance, management considers historical losses adjusted to take into account current market conditions and our customers’ financial condition, the amount of receivables in dispute, and the current receivables aging and current payment patterns. The Company reviews its allowance for doubtful accounts regularly. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Accounts Receivable is included in the “Prepaid expenses and other current assets” line item in the Company’s consolidated balance sheets. NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED ﻿ Income taxes ﻿ The Company accounts for income taxes using the asset and liability method, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of the differences between the financial statement assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates that are expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax law is recognized in income in the period that includes the enactment date. Deferred tax expense or benefit is the result of changes in deferred tax assets and liabilities. ﻿ The Company evaluates the probability of realizing the future benefits of its deferred tax assets and provides a valuation allowance for the portion of any deferred tax assets where the likelihood of realizing an income tax benefit in the future does not meet the “more-likely-than-not” criteria for recognition. The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. The Company recognizes interest and penalties related to unrecognized tax benefits in income taxes. See Note D for additional information concerning income tax, including the impact of tax reform in the United States. ﻿ Property and equipment ﻿ Property and equipment are recorded at cost. Maintenance, repairs, and renewals, which neither materially add to the value of the property nor appreciably prolong its life, are charged to expense as incurred. Depreciation is provided in amounts sufficient to relate the cost of depreciable assets to operations over the estimated useful lives of the related assets. The straight-line method of depreciation and amortization is followed for financial statement purposes. Leasehold improvements are amortized over the shorter of the life of the respective lease or the useful life of the improvements. Property and equipment are reviewed for impairment whenever events or changes in circumstances exist that indicate the carrying amount of an asset may not be recoverable. When proper ty and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period. ﻿ Notes receivable ﻿ Notes receivable consists primarily of a secured loan to the former supplier of the Company’s nutrition bars and are included in the “Other assets” line item in the Company’s consolidated balance sheets. The Company extended non-revolving credit to this former supplier to allow them to acquire equipment that is necessary to manufacture the USANA nutrition bars, which is secured by the equipment. This relationship was intended to provide improved supply chain stability for USANA and create a mutually beneficial relationship between the parties. Interest accrue d at an annual interest rate of LIBOR plus 400 basis points. The note has a maturity date of February 1, 2024 and was to be repaid by a combination of cash payments and credits for the manufacture of USANA’s nutrition bars. There is no prepayment penalty. Manufacturing credits and cash payments applied during 2016 and 2017 were $1,860 and $420, respectively. The total contractual unpaid principal balance, including accrued unpaid interest on the note receivable from this former supplier as of December 31, 2016, and December 30, 2017, were $6,867, and $6,734, respectively. ﻿ A loan is considered impaired when, based on current information and events; it is probable that the Company will be unable to collect the scheduled payments in accordance with the contractual terms of the loan. Factors considered in determining impairment include payment status, collateral value and the probability of collecting payments when due. During the first half of 2017, the Company experienced challenges with the former supplier of the Company’s nutrition bars and subsequently determined to no longer use this supplier. The Company has evaluated the recoverability of the note receivable from this supplier, considering financial data of the former supplier, and the estimated fair value of the collateralized equipment as of December 30, 2017. Based on this analysis, the Company believes it is probable that the note receivable has been impaired. Accordingly, an impairment of $2,734 was recorded as determined by the difference between the notes receivable balance and the estimated recoverable amount. The Company will continue to evaluate the recoverability of the not e receivable in future periods. NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED ﻿ The former supplier is considered to be a variable interest entity; however, the Company is not the primary beneficiary due to the inability to direct the activities that most significantly affect the former supplier's economic performance. The Company does not absorb a majority of the former supplier’s expected losses or returns. Consequentially, the financial information of the third-party supplier is not consolidated. The maximum exposure to loss as a result of the Company’s involvement with the third-party supplier is limited to the carrying value of the note receivable due from the third-party supplier. ﻿ Goodwill ﻿ Goodwill represents the excess of the purchase price over the fair market value of identifiable net assets of acquired companies. Goodwill is not amortized, but rather is tested at the reporting unit level at least annually for impairment or more frequently if triggering events or changes in circumstances indicate impairment. Initially, qualitative factors are considered to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Some of these qualitative factors may include macroeconomic conditions, industry and market considerations, a change in financial performance, entity-specific events, a sustained decrease in share price, and consideration of the difference between the fair value and carrying amount of a reporting unit as determined in the most recent quantitative assessment. If, through this qualitative assessment, the conclusion is made that it is more likely than not that a reporting unit’s fair value is less than its carrying amount, a quantitative impairment analysis is performed. This analysis involves estimating the fair value of a reporting unit using widely-accepted valuation methodologies including the income and market approaches, which requires the use of estimates and assumptions. These estimates and assumptions include revenue growth rates, discounts rates, and determination of appropriate market comparables. If the fair value of the reporting unit is less than its carrying amount, an impairment loss is recognized in an amount equal to the excess of the carrying amount over the fair value of the reporting unit, not to exceed the carrying amount of the goodwill. During 2015, 2016, and 2017, no impairment of goodwill was recorded. ﻿ Intangible assets ﻿ Intangible assets represent amortized and indefinite-lived intangible assets acquired in connection with the purchase of the Company’s China subsidiary in 2010. Amortized intangible assets are amortized over their related useful lives, using a straight-line or accelerated method consistent with the underlying expected future cash flows related to the specific intangible asset. Amortized intangible assets are reviewed for impairment whenever events or changes in circumstances exist that indicate the carrying amount of an asset may not be recoverable. When indicators of impairment exist, an estimate of undiscounted net cash flows is used in measuring whether the carrying amount of the asset or related asset group is recoverable. Measurement of the amount of impairment, if any, is based upon the difference between the asset or asset group’s carrying value and fair value. Fair value is determined through various valuation techniques, including market and income approaches as considered necessary. ﻿ Indefinite-lived intangible assets are not amortized; however, they are tested at least annually for impairment or more frequently if events or changes in circumstances exist that may indicate impairment. Initially, qualitative factors are considered to determine whether it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying amount. If, through this qualitative assessment, the conclusion is made that it is more likely than not that an indefinite-lived intangible asset’s fair value is less than its carrying amount, a quantitative impairment analysis is performed by comparing the indefinite-lived intangible asset’s carrying amount to its fair value. The fair value for indefinite-lived intangible assets is determined through various valuation techniques, including market and income approaches as considered necessary. The amount of any impairment is measured as the difference between the carrying amount and the fair value of the impaired asset. During 2015, 2016, and 2017, no impairment of indefinite-lived intangible assets was recorded. ﻿ Self insurance ﻿ The Company is self-insured, up to certain limits, for employee group health claims. The Company has purchased stop-loss insurance on both an individual and an aggregate basis, which will reimburse the Company for individual claims in excess of $125 and aggregate claims that are greater than $9,441. A liability is accrued for all unpaid claims. Total expense under this self-insurance program was $7,287, $9,015 and $9,195 in 2015, 2016 and 2017, respectively. NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED ﻿ Common stock share repurchases ﻿ The Company has a stock repurchase plan in place that has been authorized by the Board of Directors. As of December 30, 2017, $50,000 was available to repurchase shares under this plan. During the years ended 2015, 2016, and 2017, the Company repurchased and retired 914 shares, 1,106 shares, and 865 shares for an aggregate price of $61,181, $64,610, and $50,000, respectively. The excess of the repurchase price over par value is allocated between additional paid-in capital and retained earnings on a pro-rata basis. There currently is no expiration date on the remaining approved repurchase amount and no requirement for future share repurchases. ﻿ Revenue recognition and deferred revenue ﻿ Revenue is recognized at the estimated point of delivery of the merchandise, at which point the risks and rewards of ownership have passed to the customer. Revenue is realizable when the following four criteria are met: persuasive evidence of a sale arrangement exists, delivery of the product has occurred, the price is fixed or determinable, and payment is reasonably assured. ﻿ The Company receives payment, primarily via credit card, for the sale of products at the time customers place orders. Sales and related fees such as shipping and handling, net of applicable sales discounts, are recorded as revenue when the product is delivered and when title and the risk of ownership passes to the customer. Payments received for undelivered products are recorded as deferred revenue and are included in other current liabilities. Deferred revenue is recognized at the estimated point of delivery of the merchandise. On the occasion that will-call orders are not picked up by customers, we periodically assess the likelihood that customers will exercise their contractual right to pick up orders and recognize revenue when the likelihood is estimated to be remote. Certain incentives offered on the sale of our products, including sales discounts, are classified as a reduction of revenue. Sales discounts earned under USANA’s initial order reward program are considered part of a multiple element revenue arrangement and accordingly are deferred when the first order is placed and recognized as customers place their subsequent two Auto Orders. A provision for product returns and allowances is recorded and is based on historical experience. Additionally, the Company collects an annual account renewal fee from Associates that is deferred upon receipt and is recognized as revenue on a straight-line basis over the subsequent twelve-month period. ﻿ Taxes that have been assessed by governmental authorities and that are directly imposed on revenue-producing transactions between the Company and its customers, including sales, use, value-added, and some excise taxes, are presented on a net basis in the consolidated statements of comprehensive income (excluded from net sales). Product return policy ﻿ All first-time product orders, regardless of condition, that are returned within the first 30 days following purchase are refunded at 100% of the sales price. After the first order, all other returned product that is unused and resalable is refunded up to one year from the date of purchase at 100% of the sales price. This standard policy differs slightly in a few of our international markets due to the regulatory environment in those markets. According to the terms of the Associate agreement, return of product where the purchase amount exceeds one hundred dollars and was not damaged at the time of receipt by the Associate may result in cancellation of the Associate's distributorship. Depending upon the conditions under which product was returned, customers may either receive a refund based on their original form of payment, or credit on account for a product exchange. Product returns totaled approximately 0.6%, 0.7%, and 0.7% of net sales in 2015, 2016, and 2017, respectively. NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED ﻿ Shipping and handling costs ﻿ The Company’s shipping and handling costs are included in cost of sales for all periods presented. ﻿ Associate incentives ﻿ Associate incentives expenses include all forms of commissions, and other incentives paid to our Associates, less commissions paid to Associates on personal purchases, which are considered a sales discount and are reported as a reduction to net sales. ﻿ Selling, general and administrative ﻿ Selling, general and administrative expenses include wages and benefits, depreciation and amortization, rents and utilities, Associate event costs, advertising and professional fees, marketing, and research and development expenses. ﻿ Equity-based compensation ﻿ The Company records compensation expense in the financial statements for equity-based awards based on the grant date fair value. Equity-based compensation expense is recognized under the straight-line method over the period that service is provided, which is generally the vesting term. Further information regarding equity awards can be found in Note J – Equity-Based Compensation. ﻿ Advertising ﻿ Advertising costs are charged to expense as incurred and are presented as part of selling, general and administrative expense. Advertising expense totaled $13,766, $12,266, and $11,503 in 2015, 2016, and 2017, respectively. ﻿ Research and development ﻿ Research and development costs are charged to expense as incurred and are presented as part of selling, general and administrative expense. Research and development expense totaled $6,420, $8,842, and $8,952 in 2015, 2016, and 2017, respectively. ﻿ Earnings per share ﻿ Basic earnings per common share (EPS) are based on the weighted-average number of common shares that were outstanding during each period. Diluted EPS include the effect of potentially dilutive common shares calculated using the treasury stock method, which include in-the-money, equity-based awards that have been granted but have not been issued. When there is a loss, potential common shares are not included in the computation of diluted EPS, because to do so would be anti-dilutive. ﻿ Recent Accounting Pronouncements ﻿ Adopted accounting pronouncements ﻿ In July 2015 the Financial Accounting Standards Board (“FASB”) issued an Accounting Standard Update (“ASU”) No. 2 015-11, "Inventory (Topic 330): Simplifying the Measurement of Inventory." For entities that do not measure inventory using the last-in, first-out or retail inventory method, ASU 2015-11 changes the measurement principle for inventory from the lower of cost or market to lower of cost and net realizable value, where net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completio n, disposal and transportation. The ASU requires prospective adoption for inventory measurement for annual and interim periods beginning after December 15, 2016 for public business entities. The Company adopted ASU 2015-11 during 2017. The adoption of this ASU did not have an impact on the Company’s consolidated financial statements. NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED ﻿ In January 2017 the FASB issued an ASU No. 2017-04, “Intangibles-Goodwill and Other (Topic 350) Simplifying the Test for Goodwill Impairment.” ASU 2017-04 simplifies the accounting for goodwill impairment by eliminating the Step 2 requirement to calculate the implied fair value of goodwill. Instead, under ASU 2017-04, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of each reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting units fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted. The Company adopted ASU 2017-04 effective for the quarter ended September 30, 2017 in conjunction with its annual goodwill impairment test. The adoption of this ASU did not have an impact on the Company’s consolidated financial statements. ﻿ Issued, not yet adopted accounting pronouncements In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” ASU 2014-09 includes a five-step process by which entities will recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which an entity expects to be entitled in exchange for those goods or services. The standard also will require enhanced disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. In July 2015, the FASB announced a decision to defer the effective date of this ASU. ASU 2014-09 is effective for annual and interim reporting periods beginning after December 15, 2017. The amendments may be applied retrospectively to each prior period (full retrospective) or retrospectively with the cumulative effect recognized as of the date of initial application (modified retrospective). The Company plans to adopt ASU 2014-09 effective at the beginning of fiscal 2018 and apply the modified retrospective approach. ﻿ The Company has evaluated the impact of this ASU on the specific areas that apply to the Company and their potential impact to its processes, accounting, financial reporting, disclosures, and controls. The Company has determined that the overall impact of adopting this ASU will not be material to the Company’s consolidated financial statements. This ASU will primarily involve updating revenue related internal control documentation and expanding revenue disclosures in the Company’s periodic filings. ﻿ In addition to the documentation updates and expanded disclosures, the Company will be making a change in the timing for recognizing revenue on orders that have shipped but have not been delivered at period end. Under the new standard, revenue is recognized when the customer obtains control of the goods and considering the indicators used to determine when control has passed to the customer, the Company has concluded that control transfers upon shipment. Therefore, revenue will no longer be deferred on orders that have shipped but have not been delivered at period end. The balance of deferred revenue for undelivered orders at December 30, 2017 was $2,582. Related expense items including cost of goods sold and Associate incentives were also deferred in the amount of $350 and $1,147, respectively. Upon adoption, at the beginning of 2018, under the modified retrospective approach, this net deferred amount of approximately $1,085 will be adjusted to the 2018 beginning retained earnings balance as a cumulative-effect adjustment, net of taxes as applicable. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” ASU 2016-02 is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Additionally, the ASU will require disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases, including qualitative and quantitative requirements. The update requires lessees to apply a modified retrospective approach for recognition and disclosure, beginning with the earliest period presented. The ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. The Company is currently in the process of evaluating the impact of the ASU on the Company’s outstanding leases and expects that adoption will have an impact on the consolidated balance sheets related to recording right-of-use assets and corres ponding lease liabilities. NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED ﻿ In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash”. The ASU requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The ASU is effective for annual and interim periods in fiscal years beginning after December 15, 2017. The Company does not expect the adoption of ASU 2016-18 will have a material impact on its statement of cash flows. In May 2017 the FASB issued ASU No. 2017-09, “Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting.” ASU 2017-09 provides clarification on when modification accounting should be used for changes to the terms or conditions of a share-based payment award. ASU 2017-09 does not change the accounting for modifications but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions, or award classification and would not be required if the changes are considered non-substantive. The ASU is effective for all annual and interim periods in fiscal years beginning after December 15, 2017. The Company does not expect the adoption of ASU 2017-09 will have a material impact on its consolidated financial statements. ﻿ No other new accounting pronouncement issued or effective during the fiscal year had, or is expected to have, a material impact on our consolidated financial statements.

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