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Note 3 - Recent Accounting Pronouncements | 6 Months Ended
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Jun. 30, 2018
Notes to Financial Statements |
New Accounting Pronouncements and Changes in Accounting Principles [Text Block] | 3. Recent accounting pronouncements: Recent Accounting Pronouncements Adopted On January 1, 2018, the Company adopted Accounting Standards Updates ("ASU") No. 2017 - 01, Business Combinations (Topic 805 ): Clarifying the Definition of a Business and ASU 2015 - 16, Simplifying the Accounting for Measurement-Period Adjustments. The adoption of these updates did not have a significant impact on the consolidated financial statements. We also adopted ASU 2014 - 09 and the impact of such adoption is described in more detail below. ASU 2014 - 09: Adoption of Revenue from Contracts with Customers (Topic 606 ) On January 1, 2018, the Company adopted ASU 2014 - 09 using the modified retrospective method by recognizing the cumulative effect of initially applying ASU 2014 - 09 as an adjustment to the opening balance of equity as at January 1, 2018. The results for reporting periods beginning after January 1, 2018 are presented under ASU 2014 - 09, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting policy, under ASC 605, Revenue Recognition (Topic 605 ). The adoption of Topic 606 did not affect the Company’s cash flows from operating, investing, or financing activities. Furthermore, the impact on timing of revenue recognition was not material as the treatment of revenue for services rendered over time is consistent under Topic 606 and Topic 605. The details of the significant changes and quantitative impact of the changes are set out below. For a more comprehensive description of how the Company recognizes revenue under the new revenue standard in accordance with its performance obligations, see note 10. The Company previously recognized commission fees related to Ting Mobile, Ting Internet, eNom domain registration and eNom domain related value-added service contracts as selling expenses when they were incurred. Under ASU 2014 - 09, when these commission fees are deemed incremental and are expected to be recovered, the Company capitalizes as an asset such commission fees as costs of obtaining a contract. These commission fees are amortized into income consistently with the pattern of transfer of the good or service to which the asset relates. The amortization of deferred costs of acquisition are amortized into Sales and marketing expense. The estimation of the amortization period for the costs to obtain a contract required judgement. Under Topic 606, the Company has applied the following practical expedients:
| a) | When the amortization period for costs incurred to obtain a contract with a customer is less than one year, the Company has elected to apply a practical expedient to expense the costs as incurred; and
| b) | For mobile and internet access services, where the performance obligation is part of contracts that have an original expected duration of one year or less (typically one month), the Company has elected to apply a practical expedient to not disclose revenues expected to be recognized in the future related performance obligations that are unsatisfied (or partially unsatisfied).
On January 1, 2018 as a result of adopting ASU 2014 - 09, the Company recorded a contract cost asset of $1.4 million with a corresponding increase to opening retained earnings and deferred tax liability of $1.1 million and $0.3 million, respectively, due to the deferral of costs of obtaining contracts. The impact of the changes to the Company’s financial statements in the current period are as follows:
|  | June 30, 2018 |
Consolidated Balance Sheet (Dollar amounts in thousands of U.S. dollars) |  | As reported |  |  | Adjustments |  |  | Balances without adoption of Topic 606 |
Assets |  |  |  |  |  |  |  |  |  |  |  |
Contract costs (note 11) |  | $ | 1,354 |  |  | $ | (1,354 | ) |  | $ | (0 | )
Total assets |  | $ | 340,282 |  |  | $ | (1,354 | ) |  | $ | 338,928 |
Liabilities and Shareholders' Equity |  |  |  |  |  |  |  |  |  |  |  |
Deferred tax liability (note 8) |  | $ | 19,577 |  |  | $ | (329 | ) |  | $ | 19,248 |
Retained earnings |  |  | 51,027 |  |  |  | (1,025 | ) |  |  | 50,002 |
Total Liabilities and Shareholders' Equity |  | $ | 340,282 |  |  | $ | (1,354 | ) |  | $ | 338,928 |
|  | Three months ended, June 30, 2018 |  |  | Six months ended, June 30, 2018 |
Consolidated Statements of Operations and Comprehensive Income (Dollar amounts in thousands of U.S. dollars) |  | As reported |  |  | Adjustments |  |  | Balances without adoption of Topic 606 |  |  | As reported |  |  | Adjustments |  |  | Balances without adoption of Topic 606 |
Expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Sales and marketing |  | $ | 7,852 |  |  | $ | (25 | ) |  | $ | 7,827 |  |  | $ | 16,217 |  |  | $ | (50 | ) |  | $ | 16,167 |
Income before provision for income taxes |  |  | 4,836 |  |  |  | 25 |  |  |  | 4,861 |  |  |  | 9,763 |  |  |  | 50 |  |  |  | 9,813 |
Provision for income tax (note 8) |  |  | 1,228 |  |  |  | 6 |  |  |  | 1,234 |  |  |  | 2,411 |  |  |  | 12 |  |  |  | 2,423 |
Net income for the period |  | $ | 3,608 |  |  | $ | 19 |  |  | $ | 3,627 |  |  | $ | 7,352 |  |  | $ | 38 |  |  | $ | 7,390 |
|  | Three months ended, June 30, 2018 |  |  | Six months ended, June 30, 2018 |
Consolidated Statements of Cash Flows (Dollar amounts in thousands of U.S. dollars) |  | As reported |  |  | Adjustments |  |  | Balances without adoption of Topic 606 |  |  | As reported |  |  | Adjustments |  |  | Balances without adoption of Topic 606 |
Net income for the period |  | $ | 3,608 |  |  | $ | 19 |  |  | $ | 3,627 |  |  | $ | 7,352 |  |  | $ | 38 |  |  | $ | 7,390 |
Items not involving cash |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Amortization contract costs |  |  | 25 |  |  |  | (25 | ) |  |  | (0 | ) |  |  | 50 |  |  |  | (50 | ) |  |  | 0 |
Deferred income taxes (recovery) |  |  | (445 | ) |  |  | 6 |  |  |  | (439 | ) |  |  | (492 | ) |  |  | 12 |  |  |  | (480 | )
Net cash provided by operating activities |  | $ | 5,754 |  |  | $ | (0 | ) |  | $ | 5,754 |  |  | $ | 15,327 |  |  | $ | - |  |  | $ | 15,327 |
Recent Accounting Pronouncements Not Yet Adopted In February 2016, the Financial Accounting Standards Board issued ASU No. 2016 - 02, Leases (Topic 842 ) (“ASU 2016 - 02” ). ASU 2016 - 02 requires lessees to recognize the assets and liabilities that arise from leases on the balance sheet. More specifically, ASU 2016 - 02 requires the recognition on the balance sheet of a lease liability to make lease payments by lessees and a right-of-use asset representing its right to use the underlying asset for the lease term. The new guidance will also require significant additional disclosure about the amount, timing and uncertainty of cash flows from leases. The new guidance is effective for annual and interim reporting periods beginning after December 15, 2018, which begins on January 1, 2019 for the Company. The amendments should be applied at the beginning of the earliest period presented using a modified retrospective approach with earlier application permitted as of the beginning of an interim or annual reporting period. The Company will adopt this guidance in the first quarter of fiscal 2019. The Company is currently in the process of evaluating the impact of transition methods. While we are continuing to assess all potential impacts of the standard, we currently believe the most significant impact relates to our accounting for administrative office operating leases.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -URI http://asc.fasb.org/topic&trid=2122394 + Details
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