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Recently Issued Accounting Pronouncements | 12 Months Ended
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Dec. 31, 2017
Recently Issued Accounting Pronouncements |
Recently Issued Accounting Pronouncements | 17. Recently Issued Accounting Pronouncements In February 2018, the FASB issued ASU No. 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act passed by the U.S. federal government in December 2017. This ASU is effective for the annual period beginning after December 15, 2018, and for annual and interim periods thereafter. The Company does not believe this ASU will have a material impact on its condensed consolidated financial statements. In May 2017, the FASB issued ASU No. 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting, which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. This ASU is effective for the annual period beginning after December 15, 2017, and for annual and interim periods thereafter. The Company does not believe this ASU will have a material impact on its condensed consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which is intended to simplify accounting for share-based payments awarded to employees, including income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This ASU was effective for the annual period beginning after December 15, 2016, and for annual and interim periods thereafter. The Company adopted ASU 2016-09 in the first quarter of 2017 and elected to account for forfeitures as they occur, rather than estimate expected forfeitures. A s a result of adopting this standard, the Company applied the modified retrospective approach and recorded a cumulative-effect adjustment within the Consolidated Statements of Stockholders’ Equity that had no material impact on the Company’s condensed consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which will require organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. In January 2017, the FASB issued ASU No. 2017-03, Accounting Changes and Error Corrections (Topic 250) and Investments – Equity Method and Joint Ventures (Topic 323), which stated additional qualitative disclosures should be considered to assess the significance of the impact upon adoption. This ASU is effective for the annual period beginning after December 15, 2018, and for annual and interim periods thereafter. Early adoption is permitted. In January 2018, the FASB issued ASU No. 2018-01, Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842, which provides an optional transition practical expedient to not evaluate under Topic 842 existing or expired land easements that were not previously accounted for as leases under the current lease guidance in Topic 840. The Company is currently evaluating the new guidance and practical expedient to determine the impact they will have on its condensed consolidated financial statements and believes that the most significant change will be to its Condensed Consolidated Balance Sheets as its asset and liability balances will increase for operating leases that are currently off-balance sheet. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which introduces a new five-step revenue recognition model in which an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires disclosures sufficient to enable users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative disclosures about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. Entities have the option of using either a full retrospective or modified approach to adopt ASU No. 2014-09. Subsequent amendments to the initial guidance have been issued in March 2016, April 2016, May 2016, December 2016, January 2017, and September 2017 within ASU No. 2016-08, ASU No. 2016-10, ASU No. 2016-12, ASU No. 2016-20, ASU No. 2017-03, and ASU No. 2017-13 regarding principal-versus-agent, performance obligations and licensing, assessing collectability, presentation of sales taxes, noncash consideration, and completed contracts and contract modifications at transition. These updates do not change the core principle of the guidance under ASU No. 2014-09, but rather provide implementation guidance. This new standard must be adopted by the Company in our calendar year beginning January 1, 2018. The Company has completed its assessment of the new standard and are adopting the standard using the full retrospective method. The expected impact of adopting the new standard on the Company’s 2017 and 2016 consolidated financial statements will not have a material impact on the overall operating results of the Company and is reflected below. The primary impact of adopting the new standard will be delayed recognition of certain miscellaneous revenues and certain fulfillment costs that are being recognized as incurred under our current revenue recognition policy. These revenues and expenses will be estimated and allocated over the life of the contract rather than recognized as services are provided. Select line items from the Company’s Consolidated Statements of Operations and Comprehensive Loss which reflect the expected adoption of the new standard will be as follows (in thousands except per share data):
|  | Year Ended December 31,
|  |  | 2017 |  |  | 2016
Operating revenues |  | $ | 156,532 |  | $ | 137,640
Operating expenses |  | $ | 139,072 |  | $ | 124,024
Loss from operations |  | $ | (37,964) |  | $ | (47,489)
Net loss |  | $ | (31,790) |  | $ | (37,845)
Diluted loss per share attributed to common stock |  | $ | (1.47) |  | $ | (1.75)
There will be no effect on income taxes for the years ended December 31, 2017 and 2016 as the Company is in a full valuation allowance domestically. Select line items from the Company’s Consolidated Balance Sheets which reflect the expected adoption of the new standard are as follows (in thousands):
|  |  |  |  | December 31, 2017
Accounts receivable, net |  |  |  |  | $ | 33,157
Prepaid expenses and other current assets |  |  |  |  | $ | 7,339
Deferred revenue |  |  |  |  | $ | 6,314

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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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