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Recent Accounting Pronouncement
 9 Months Ended
Sep. 30, 2020
Recent Accounting Pronouncement  
Recent Accounting Pronouncement
3. RECENT ACCOUNTING PRONOUNCEMENTS
 
 
Current expected credit loss (CECL)
 
In June 2016, the FASB
 
issued ASU 2016-13, “Financial Instruments
 
-Credit Losses,” which changes
 
the impairment model for
most financial assets
 
and certain other
 
instruments. For trade
 
and other receivables,
 
held-to-maturity debt securities,
 
loans and
other instruments, entities will
 
be required to use
 
a new forward-looking “expected
 
loss” model that will
 
replace today’s “incurred
loss” model and generally will result in
 
the earlier recognition of allowances for losses. For
 
available-for-sale debt securities with
unrealized losses,
 
entities will
 
measure credit
 
losses in
 
a manner
 
similar to
 
current practice,
 
except that
 
the losses
 
will be
recognized as an allowance.
 
Subsequent to issuing ASU 2016
 
-13, the FASB issued
 
ASU 2018-19, “Codification Improvements
to Topic 326, Financial Instruments
 
- Credit Losses,” for
 
the purpose of clarifying
 
certain aspects of ASU 2016
 
-13. ASU 2018-
19 has
 
the same
 
effective date
 
and transition
 
requirements as
 
ASU 2016
 
-13. In
 
April 2019,
 
the FASB
 
issued ASU 2019
 
-04,
“Codification Improvements to Topic 326, Financial Instruments - Credit Losses,
 
Topic 815, Derivatives and Hedging, and Topic
825, Financial Instruments,
 
”
 
which is effective
 
with the adoption
 
of ASU 2016-13. In
 
May 2019, the
 
FASB issued ASU 2019-
05, “Financial Instruments - Credit Losses (Topic 326),” which is
 
also effective with the adoption of ASU
 
2016-13. In November
2019, the FASB voted to delay the implementation date for certain companies, including those that qualify as a smaller reporting
company under SEC rules, until fiscal years beginning
 
after December 15, 2022. We will adopt
 
this ASU on its effective date of
January 1, 2023.
 
We do not
 
expect the adoption
 
of this ASU to
 
have a material
 
impact on our
 
consolidated financial
 
position,
results of operations, cash flows, or presentation thereof.
 
 
Simplifying the Accounting for Income Taxes
 
In December 2019, the FASB issued
 
ASU 2019-12, Income Taxes –
 
Simplifying the Accounting for Income
 
Taxes. This guidance
is intended to
 
simplify various aspects
 
of income tax
 
accounting including the
 
elimination of certain
 
exceptions related
 
to the
approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of
deferred tax
 
liabilities for
 
outside basis
 
differences. The
 
new guidance also
 
simplifies aspects
 
of the accounting
 
for franchise
taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis
of goodwill. The Company adopted
 
the new standard effective January
 
1, 2020 during the third
 
quarter with no material impact
on our consolidated financial statements. Adoption of this guidance requires certain changes to primarily be made prospectively,
with some changes to be made retrospectively.
 
 
 
Facilitation of the Effects of Reference Rate Reform
 
In March 2020, the FASB issued ASU No. 2020-04, Facilitation of the Effects of Reference Rate Reform on
 
Financial Reporting
(Topic 848). The ASU provides optional expedients and exceptions for applying GAAP
 
to transactions affected by reference rate
(e.g., LIBOR) reform
 
if certain criteria
 
are met, for
 
a limited period
 
of time to
 
ease the potential
 
burden in accounting
 
for (or
recognizing the
 
effects of)
 
reference rate
 
reform on
 
financial reporting.
 
The ASU is
 
effective as
 
of March
 
12, 2020
 
through
December 31, 2022.
 
We will evaluate
 
transactions or contract
 
modifications occurring as
 
a result of
 
reference rate reform
 
and
determine whether to apply the optional guidance on an ongoing basis.