Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2013 |
Accounting Policies [Abstract] | ' |
Description of Business | ' |
Description of Business |
Immersion Corporation (the “Company”) was incorporated in 1993 in California and reincorporated in Delaware in 1999. It is an intellectual property (“IP”) and technology licensing company focused on the creation, design, development, and licensing of innovations and technologies that allow people to use their sense of touch more fully when operating a wide variety of digital devices. |
Principles of Consolidation and Basis of Presentation | ' |
Principles of Consolidation and Basis of Presentation |
The consolidated financial statements include the accounts of Immersion Corporation and its wholly-owned subsidiaries, Immersion Canada Inc.; Immersion International, LLC; Immersion Medical, Inc.; Immersion Japan K.K.; Immersion Ltd.; Immersion Software Ireland Ltd.; and Haptify, Inc. All intercompany accounts, transactions, and balances have been eliminated in consolidation. The Company has prepared the accompanying consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”). |
Cash Equivalents | ' |
Cash Equivalents |
The Company considers all highly liquid instruments purchased with an original or remaining maturity of less than three months at the date of purchase to be cash equivalents. |
Short-term Investments | ' |
Short-term Investments |
The Company’s short-term investments consist primarily of U.S treasury bills and government agency securities purchased with an original or remaining maturity of greater than 90 days on the date of purchase. The Company classifies debt securities with readily determinable market values as “available-for-sale.” Even though the stated maturity dates of these debt securities may be one year or more beyond the balance sheet date, the Company has classified all debt securities as short-term investments as they are reasonably expected to be realized in cash or sold within one year. These investments are carried at fair market value with unrealized gains and losses considered to be temporary in nature reported as a separate component of other comprehensive income (loss) within stockholders’ equity. |
The Company recognizes an impairment charge in the consolidated statement of operations when a decline in value is judged to be other than temporary based on the specific identification method. Other-than-temporary impairment charges may exist when the Company has the intent to sell the security, will more likely than not be required to sell the security, or does not expect to recover the principal. |
Property and Equipment | ' |
Property and Equipment |
Property is stated at cost and is depreciated using the straight-line method over the estimated useful life of the related asset. The estimated useful lives are typically as follows: |
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Computer equipment and purchased software | | | 3 years | | | | | | | | | |
Machinery and equipment | | | 3-5 years | | | | | | | | | |
Furniture and fixtures | | | 5 years | | | | | | | | | |
Leasehold improvements are amortized over the shorter of the lease term or their estimated useful life. |
Intangible Assets | ' |
Intangible Assets |
Intangible assets with finite useful lives are amortized and intangible assets with indefinite lives are not amortized but rather are tested at least annually for impairment. |
The Company has acquired patents and other intangible assets. Costs associated with acquired patents and other intangible assets are capitalized as incurred. These costs are amortized utilizing the straight-line method, which approximates the pattern of consumption over the estimated useful lives of the respective assets, generally ten years. |
The Company also internally develops and licenses IP and software , and when possible, it protects its IP and software with patents and trademarks. During the fourth quarter 2013, the Company elected to change its method of accounting for external patent-related costs associated with its internally developed patents and trademarks. Prior to the change, the Company capitalized the external legal, filing, continuation or annuity fees associated with patent and trademark applications. These costs were amortized on a straight-line basis over their estimated economic useful lives which were generally 10 years from the date of issuance. Under the new method of accounting, external patent-related costs are expensed as incurred and classified as general and administrative expenses in our consolidated statement of operations, consistent with the classification of internal legal costs associated with internally developed patents and trademarks. |
Prior to the change in accounting method, the Company had a net intangible balance of $17.6 million associated with capitalized external patent-related costs, comprised of $10.2 million in costs related to unissued patent applications and $13.5 million in costs related to issued patents, with accumulated amortization of $6.1 million. The impact of the change in accounting method on the Company’s financial statements and disclosures is described below. |
The Company believes that this change is preferable because it will result in consistent treatment of all patent-related costs. Under the new method, both internal and external costs associated with the Company’s patent and trademark applications are expensed as incurred, thereby increasing the transparency and relevance of the financial statements. In addition, the change in method will reduce the burden to track and maintain the patent costs related to internally developed patents, and will eliminate the subjectivity and judgment involved in assessing the Company’s patent portfolio for impairment arising in part from the lengthy patent approval process. The change in method also will provide for a better comparison with the Company’s industry peers, as the predominant industry practice is to expense external patent-related costs as incurred. |
In accordance with Accounting Standards Codification (“ASC”) 250, “Accounting Changes and Error Corrections,” the change in accounting method has been retrospectively applied to all prior periods presented herein. Comparative financial statements of prior years have been adjusted to apply the new method retrospectively. As a result of the accounting change, the accumulated deficit increased $11.4 million as of December 31, 2013, from $75.5 million as of December 31, 2013 to $86.9 million as of December 31, 2013.The following tables summarize the impact on line items of the change in accounting method on the current and previously issued balance sheet as of December 31, 2013 and 2012, statements of operations for the years ended December 31, 2013, 2012, and 2011, and the statements of cash flows for the years ended December 31, 2013, 2012, and 2011. |
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CONSOLIDATED BALANCE SHEET | | As of December 31, 2013 | |
(In thousands) | | Before | | | After | | | Effect of | |
| Change | Change | Change |
Deferred income taxes | | $ | 7,779 | | | $ | 7,784 | | | $ | 5 | |
Deferred income tax assets | | $ | 22,939 | | | $ | 29,066 | | | $ | 6,127 | |
Intangibles and other assets, net | | $ | 17,979 | | | $ | 381 | | | $ | (17,598 | ) |
Accumulated deficit | | $ | (75,463 | ) | | $ | (86,929 | ) | | $ | (11,466 | ) |
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CONSOLIDATED BALANCE SHEET | | As of December 31, 2012 | |
(In thousands) | | As Previously | | | As | | | Effect of | |
| Reported | Adjusted | Change |
Deferred income taxes | | $ | 165 | | | $ | 0 | | | $ | (165 | ) |
Deferred income tax assets | | $ | 0 | | | $ | 97 | | | $ | 97 | |
Intangibles and other assets, net | | $ | 15,725 | | | $ | 362 | | | $ | (15,363 | ) |
Other current liabilities | | $ | 1,022 | | | $ | 1,119 | | | $ | 97 | |
Deferred income tax liabilities | | $ | 165 | | | $ | 0 | | | $ | (165 | ) |
Accumulated deficit | | $ | (111,721 | ) | | $ | (127,084 | ) | | $ | (15,363 | ) |
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CONSOLIDATED STATEMENT OF OPERATIONS | | Year Ended December 31, 2013 | |
(In thousands, except for per share amounts) | | Before | | | After | | | Effect of | |
| Change | Change | Change |
General and administrative | | $ | 19,193 | | | $ | 23,104 | | | $ | 3,911 | |
Amortization of intangibles | | $ | 1,755 | | | $ | 79 | | | $ | (1,676 | ) |
Benefit (provision) for income taxes. | | $ | 30,351 | | | $ | 36,483 | | | $ | 6,132 | |
Income from continuing operations | | $ | 36,258 | | | $ | 40,155 | | | $ | 3,897 | |
Net income | | $ | 36,258 | | | $ | 40,155 | | | $ | 3,897 | |
Basic net income per share — continuing operations | | $ | 1.29 | | | $ | 1.42 | | | $ | 0.13 | |
Basic net income per share — Total | | $ | 1.29 | | | $ | 1.42 | | | $ | 0.13 | |
Diluted net income per share — continuing operations | | $ | 1.24 | | | $ | 1.37 | | | $ | 0.13 | |
Diluted net income per share — Total | | $ | 1.24 | | | $ | 1.37 | | | $ | 0.13 | |
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CONSOLIDATED STATEMENT OF OPERATIONS | | Year Ended December 31, 2012 | |
(In thousands, except for per share amounts) | | As Previously | | | As | | | Effect of | |
| Reported | Adjusted | Change |
General and administrative | | $ | 19,326 | | | $ | 22,464 | | | $ | 3,138 | |
Amortization of intangibles | | $ | 1,554 | | | $ | 49 | | | $ | (1,505 | ) |
Loss from continuing operations | | $ | (5,717 | ) | | $ | (7,350 | ) | | $ | (1,633 | ) |
Net loss | | $ | (5,564 | ) | | $ | (7,197 | ) | | $ | (1,633 | ) |
Basic and diluted net loss per share — continuing operations | | $ | (0.21 | ) | | $ | (0.27 | ) | | $ | (0.06 | ) |
Basic and diluted net loss per share — Total | | $ | (0.20 | ) | | $ | (0.26 | ) | | $ | (0.06 | ) |
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CONSOLIDATED STATEMENT OF OPERATIONS | | Year Ended December 31, 2011 | |
(In thousands, except for per share amounts) | | As Previously | | | As | | | Effect of | |
| Reported | Adjusted | Change |
General and administrative | | $ | 12,568 | | | $ | 15,749 | | | $ | 3,181 | |
Amortization of intangibles | | $ | 1,394 | | | $ | 39 | | | $ | (1,355 | ) |
Loss from continuing operations | | $ | (1,665 | ) | | $ | (3,491 | ) | | $ | (1,826 | ) |
Net loss | | $ | (1,604 | ) | | $ | (3,430 | ) | | $ | (1,826 | ) |
Basic and diluted net loss per share — continuing operations | | $ | (0.06 | ) | | $ | (0.12 | ) | | $ | (0.06 | ) |
Basic and diluted net loss per share — Total | | $ | (0.06 | ) | | $ | (0.12 | ) | | $ | (0.06 | ) |
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CONSOLIDATED STATEMENT OF CASH FLOWS | | Year Ended December 31, 2013 | |
(In thousands) | | Before | | | After | | | Effect of | |
| Change | Change | Change |
Cash flows from operating activities: | | | | | | | | | | | | |
Net income | | $ | 36,258 | | | $ | 40,155 | | | $ | 3,897 | |
Amortization of intangibles | | $ | 1,755 | | | $ | 79 | | | $ | (1,676 | ) |
Deferred income taxes | | $ | (30,718 | ) | | $ | (36,850 | ) | | $ | (6,132 | ) |
Accounts payable | | $ | 86 | | | $ | 341 | | | $ | 255 | |
Accrued compensation and other current liabilities | | $ | 2,666 | | | $ | 2,788 | | | $ | 122 | |
Cash flows provided by (used in) investing activities: | | | | | | | | | | | | |
Additions to Intangibles | | $ | (3,534 | ) | | $ | 0 | | | $ | 3,534 | |
Supplemental disclosure of non-cash investing and financing activities: | | | | | | | | | | | | |
Amounts accrued for property and equipment | | $ | 843 | | | $ | 24 | | | $ | (819 | ) |
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CONSOLIDATED STATEMENT OF CASH FLOWS | | Year Ended December 31, 2012 | |
(In thousands) | | As Previously | | | As Adjusted | | | Effect of | |
| Reported | Change |
Cash flows from operating activities: | | | | | | | | | | | | |
Net loss | | $ | (5,564 | ) | | $ | (7,197 | ) | | $ | (1,633 | ) |
Amortization of intangibles | | $ | 1,554 | | | $ | 49 | | | $ | (1,505 | ) |
Accounts payable | | $ | (18 | ) | | $ | 8 | | | $ | 26 | |
Accrued compensation and other current liabilities | | $ | (685 | ) | | $ | (717 | ) | | $ | (32 | ) |
Cash flows provided by (used in) investing activities: | | | | | | | | | | | | |
Additions to Intangibles | | $ | (3,244 | ) | | $ | (100 | ) | | $ | 3,144 | |
Supplemental disclosure of non-cash investing and financing activities: | | | | | | | | | | | | |
Amounts accrued for property and equipment | | $ | 442 | | | $ | 0 | | | $ | (442 | ) |
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CONSOLIDATED STATEMENT OF CASH FLOWS | | Year Ended December 31, 2011 | |
(In thousands) | | As Previously | | | As Adjusted | | | Effect of | |
| Reported | Change |
Cash flows from operating activities: | | | | | | | | | | | | |
Net loss | | $ | (1,604 | ) | | $ | (3,430 | ) | | $ | (1,826 | ) |
Amortization of intangibles | | $ | 1,394 | | | $ | 39 | | | $ | (1,355 | ) |
Accounts payable | | $ | (24 | ) | | $ | (47 | ) | | $ | (23 | ) |
Accrued compensation and other current liabilities | | $ | (785 | ) | | $ | (917 | ) | | $ | (132 | ) |
Cash flows provided by (used in) investing activities: | | | | | | | | | | | | |
Additions to Intangibles | | $ | (3,336 | ) | | $ | 0 | | | $ | 3,336 | |
Supplemental disclosure of non-cash investing and financing activities: | | | | | | | | | | | | |
Amounts accrued for property and equipment | | $ | 1,222 | | | $ | 775 | | | $ | (447 | ) |
Long-lived Assets | ' |
Long-lived Assets |
The Company evaluates its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of that asset may not be recoverable. An impairment loss would be recognized when the sum of the undiscounted future net cash flows expected to result from the use of the asset and its eventual disposition is less than its carrying amount. Measurement of an impairment loss for long-lived assets and certain identifiable intangible assets that management expects to hold and use is based on the fair value of the asset. |
Revenue Recognition | ' |
Revenue Recognition |
The Company recognizes revenues in accordance with applicable accounting standards, including ASC 605-10-S99, “Revenue Recognition” (“ASC 605-10-S99”); ASC 605-25, “Multiple Element Arrangements” (“ASC 605-25”); and ASC 985-605, “Software-Revenue Recognition” (“ASC 985-605”). The Company derives its revenues from three principal sources: royalty and license fees, product sales, and development contracts. As described below, management judgments, assumptions, and estimates must be made and used in connection with the revenue recognized in any accounting period. Material differences may result in the amount and timing of revenue for any period based on the judgments and estimates made by management. Specifically, in connection with each transaction, the Company must evaluate whether: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred, (iii) the fee is fixed or determinable, and (iv) collectibility is probable. The Company applies these criteria as discussed below. |
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| • | | Persuasive evidence of an arrangement exists. For a license arrangement, the Company requires a written contract, signed by both the customer and the Company. For a stand-alone product sale, the Company requires a purchase order or other form of written agreement with the customer. | | | | | | | | | |
| • | | Delivery has occurred. The Company delivers software and product to customers physically and also delivers software electronically. For physical deliveries not related to software, the transfer terms typically include transfer of title and risk of loss at the Company’s shipping location. For electronic deliveries, delivery occurs when the Company provides the customer access codes or “keys” that allow the customer to take immediate possession of the software. | | | | | | | | | |
| • | | The fee is fixed or determinable. The Company’s arrangement fee is based on the use of standard payment terms which are those that are generally extended to the majority of customers. For transactions involving extended payment terms, the Company deems these fees not to be fixed or determinable for revenue recognition purposes and revenue is deferred until the fees become due and payable. | | | | | | | | | |
| • | | Collectibility is probable. To recognize revenue, the Company must judge collectibility of the arrangement fees, which is done on a customer-by-customer basis pursuant to the credit review policy. The Company typically sells to customers with whom there is a history of successful collection. For new customers, the Company evaluates the customer’s financial condition and ability to pay. If it is determined that collectibility is not probable based upon the credit review process or the customer’s payment history, revenue is recognized when payment is received. | | | | | | | | | |
Royalty and license revenue — The Company licenses its patents and software to customers in a variety of industries such as mobility, gaming, automotive, and medical devices. A majority of these are variable fee arrangements where the royalties earned by the Company are based on unit or sales volumes of the respective licensees. The Company also enters into fixed license fee arrangements. The terms of the royalty agreements generally require licensees to give notification of royalties due to the Company within 30 – 45 days of the end of the quarter during which their related sales occur. As the Company is unable to reliably estimate the licensees’ sales in any given quarter to determine the royalties due to it, the Company recognizes royalty revenues based on royalties reported by licensees and when all revenue recognition criteria are met. Certain royalties are based upon customer shipments or revenues and could be subject to change and may result in out of period adjustments. The Company recognizes fixed license fee revenue for licenses to IP and software when earned under the terms of the agreements, which is generally recognized on a straight-line basis over the expected term of the license. |
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Development, services, and other revenue — Development, services, and other revenue are comprised of engineering services (engineering services and/or development contracts), and in limited cases, post contract customer support (“PCS”). Engineering services revenues are recognized under the proportional performance accounting method based on physical completion of the work to be performed or completed performance method. A provision for losses on contracts is made, if necessary, in the period in which the loss becomes probable and can be reasonably estimated. Revisions in estimates are reflected in the period in which the conditions become known. To date, such losses have not been significant. Revenue from PCS is typically recognized over the period of the ongoing obligation, which is generally consistent with the contractual term. |
Multiple element arrangements — The Company enters into multiple element arrangements in which customers purchase time-based non-exclusive licenses that cannot be resold to others, which include a combination of software and/or IP licenses, engineering services, and in limited cases PCS. For arrangements that are software based and include software and engineering services, the services are generally not essential to the functionality of the software, and customers may purchase engineering services to facilitate the adoption of the Company’s technology, but they may also decide to use their own resources or appoint other engineering service organizations to perform these services. For arrangements that are in substance subscription arrangements, the entire arrangement fee is recognized ratably over the contract term, subject to any limitations related to extended payment terms. For arrangements involving upfront fees for services and royalties earned by the Company based on unit or sales volumes of the respective licensees, and the services are performed ratably over the arrangement or front-end loaded; the upfront fees are recognized ratably over the contract term and royalties based on unit or sales volume are recognized when they become fixed and determinable. As the Company is unable to reliably estimate the licensees’ sales in any given quarter to determine the royalties due to it, the Company recognizes per unit or sales volume driven royalty revenues based on royalties reported by licensees and when all revenue recognition criteria are met. |
Product sales — The Company recognizes revenue from the sale of products and the license of associated software, if any, and expenses all related costs of products sold, once delivery has occurred and customer acceptance, if required, has been achieved. The Company typically grants to customers a warranty that guarantees the products will substantially conform to the Company’s current specifications for generally three to twelve months from the delivery date pursuant to the terms of the arrangement. Historically, warranty-related costs have not been significant. |
Advertising | ' |
Advertising |
Advertising costs (including obligations under cooperative marketing programs) are expensed as incurred and included in sales and marketing expense. Advertising expense was as follows: |
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| | Year ended December 31, | |
| | 2013 | | | 2012 | | | 2011 | |
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Advertising expense | | $ | 322 | | | $ | 152 | | | $ | 192 | |
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Research and Development | ' |
Research and Development |
Research and development costs are expensed as incurred. The Company has sometimes generated revenues from development contracts with commercial customers that have enabled it to accelerate its own product development efforts. Such development revenues have only partially funded the Company’s product development activities, and the Company generally retains ownership of the products developed under these arrangements. As a result, the Company classifies all development costs related to these contracts as research and development expenses. |
Income Taxes | ' |
Income Taxes |
The Company uses the asset and liability method of accounting for income taxes. Under this method, income tax expense is recognized for the amount of taxes payable or refundable for the current year. In addition, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating losses and tax credit carryforwards. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized and are reversed at such time that realization is believed to be more likely than not. |
Software Development Costs | ' |
Software Development Costs |
Certain of the Company’s products include software. Costs for the development of new software products and substantial enhancements to existing software products are expensed as incurred until technological feasibility has been established, at which time any additional costs would be capitalized. The Company considers technological feasibility to be established upon completion of a working model of the software and the related hardware. Because the Company believes its current process for developing software is essentially completed concurrently with the establishment of technological feasibility, no costs have been capitalized to date. |
Stock-based Compensation | ' |
Stock-based Compensation |
Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense on a straight-line basis over the requisite service period, which is the vesting period. See Note 10 for further information regarding the Company’s stock-based compensation assumptions and expenses. |
Comprehensive Income (Loss) | ' |
Comprehensive Income (Loss) |
Comprehensive income (loss) includes net income (loss) as well as other items of comprehensive income or loss. The Company’s other comprehensive income (loss) consists of foreign currency translation adjustments and unrealized gains and losses on available-for-sale securities, net of tax. |
Use of Estimates | ' |
Use of Estimates |
The preparation of consolidated financial statements and related disclosures in accordance with GAAP and pursuant to the rules and regulations of the SEC 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 include valuation of short-term investments, income taxes including uncertain tax provisions, revenue recognition, stock-based compensation, contingent liabilities from litigation, and accruals for other liabilities. Actual results may differ materially from those estimates. |
Concentration of Credit Risks | ' |
Concentration of Credit Risks |
Financial instruments that potentially subject the Company to a concentration of credit risk principally consist of cash, cash equivalents, short term investments, and accounts receivable. The Company invests primarily in money market accounts and highly liquid debt instruments purchased with an original or remaining maturity of greater than 90 days on the date of purchase. Deposits held with banks may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand. The Company licenses technology primarily to companies in North America, Europe, and the Far East. To reduce credit risk, management performs periodic credit evaluations of its customers’ financial condition. The Company maintains reserves for estimated potential credit losses, but historically has not experienced any significant losses related to individual customers or groups of customers in any particular industry or geographic area. |
Certain Significant Risks and Uncertainties | ' |
Certain Significant Risks and Uncertainties |
The Company operates in multiple industries and, accordingly, can be affected by a variety of factors. For example, management of the Company believes that changes in any of the following areas could have a negative effect on the Company in terms of its future financial position and results of operations: the mix of revenues; the loss of significant customers; fundamental changes in the technologies underlying the Company’s and its licensees’ products; market acceptance of the Company’s and its licensees’ products under development; development of sales channels; litigation or other claims in which the Company is involved; the ability to successfully assert its patent rights against others; the impact of changing economic conditions; the hiring, training, and retention of key employees; successful and timely completion of product and technology development efforts; and new product or technology introductions by competitors. |
Fair Value of Financial Instruments | ' |
Fair Value of Financial Instruments |
Financial instruments consist primarily of cash equivalents, short-term investments, accounts receivable and accounts payable. Cash equivalents and short term investments are stated at fair value based on quoted market prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency. The recorded cost of accounts receivable and accounts payable approximate the fair value of the respective assets and liabilities. |
Foreign Currency Translation | ' |
Foreign Currency Translation |
The functional currency of the Company’s foreign subsidiaries is U. S. dollars. Accordingly, gains and losses from the translation of the financial statements of the foreign subsidiaries and foreign currency transaction gains and losses are included in earnings. |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements |
In February 2013, the Financial Accounting Standards Board (“FASB”) ratified Accounting Standards Update (“ASU”) 2013-02 “Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Comprehensive Income” (“ASU 2013-02). ASU 2013-02 requires entities to disclose additional information about items reclassified out of accumulated other comprehensive income (“AOCI”) including AOCI balances by component and significant items reclassified out of AOCI. This ASU is effective for reporting periods beginning after December 15, 2012, and is being applied prospectively. These amendments will change the manner in which the Company presents comprehensive income by reporting these additional disclosure items in the consolidated statements of operations and comprehensive loss or footnotes when they occur. |
In July 2013, the FASB ratified ASU 2013-11 “Presenting an Unrecognized Tax Benefit (“UTB”) When a Net Operating Loss Carryforward Exists” (“ASU 2013-11”). ASU 2013-02 provides that an UTB, or a portion thereof, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except to the extent that a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date to settle any additional income taxes that would result from disallowance of a tax position, or the tax law does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, then the unrecognized tax benefit should be presented as a liability. This ASU is effective for reporting periods beginning after December 15, 2013, and may be applied retrospectively. The Company is required to adopt ASU 2013-11 as of January 1, 2014, and is currently evaluating the potential impact, if any, of the adoption on its consolidated results of operations and financial condition. |