| Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
| Dec. 31, 2016 |
| Basis of Presentation | Basis of Presentation
The consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the
United States of America (U.S. GAAP). The consolidated financial
statements include the accounts of SMTC and its wholly-owned
subsidiaries. The Company owns 100% of the outstanding shares in
all of its subsidiaries. All significant intercompany balances and
transactions have been eliminated upon consolidation. |
| Use of Estimates | Use of Estimates
The preparation of consolidated financial statements in conformity
with U.S. GAAP requires management to make estimates and
assumptions that affect certain reported amounts and disclosures.
The actual results could differ from those estimates. |
| Concentration of Credit Risk and Significant Customers | Concentration of Credit Risk and Significant
Customers
Financial instruments that potentially subject the Company to a
significant concentration of credit risk consist principally of
cash equivalents, short term investments and accounts receivable.
Cash, cash equivalents and short-term investments balances are
maintained with high quality financial institutions, the
composition and maturities of which are regularly monitored by
management. The Company believes that the concentration of credit
risk in its trade receivables, is substantially mitigated by the
Company’s credit evaluation process, relatively short
collection terms and the high level of credit worthiness of its
customers. The Company performs ongoing credit evaluations of its
customers’ financial conditions and limits the amount of
credit extended when deemed necessary based upon payment history
and the customer’s current credit worthiness, but generally
requires no collateral. The Company regularly reviews the allowance
for bad debt and doubtful accounts by considering factors such as
historical experience, credit quality, age of the accounts
receivable balances and current economic conditions that may affect
a customer’s ability to pay.
Historically, a relatively small number of customers have accounted
for a significant portion of our net revenue. Sales to two
customers in 2014, and one customer in 2015 and 2016 accounted for
10% or more of the Company’s net sales, represented 47%, 30%
and 28% of the Company’s net sales in 2014, 2015 and 2016,
respectively. In 2014, the significant customers were Samsung and
SK Hynix and in 2015 and 2016, SK Hynix. The Company’s top
ten customers in 2014, 2015 and 2016 accounted for approximately
76%, 72% and 75% of net sales. |
| Fair Value of Financial Instruments | Fair Value of Financial Instruments
The carrying amount of the Company’s financial instruments,
including cash and cash equivalents, notes and accounts receivable
and notes and accounts payables approximates fair value due to the
short-term maturity of the instruments. Fair values of short-term
investments represent quoted market prices, if available. If no
quoted market prices are available, fair values are estimated based
on discounted cash flow, or other valuation techniques. Long-term
investments are privately-held companies where there is no readily
determinable market value and are recorded using the cost method,
since the cost of obtaining verifiable fair value is unreasonably
high. The Company periodically evaluates these investments for
impairment. If it is determined that an other-than-temporary
decline has occurred in the carrying value, an impairment loss is
recorded for that period. The Company’s long-term liabilities
approximate their fair values as they contain interest rates that
vary according to market interest rates.
Fair value is the price that would be received upon sale of an
asset or paid upon transfer of a liability in an orderly
transaction between market participants at the measurement date and
in the principal or most advantageous market for that assets or
liability. The fair value should be calculated based on assumptions
that market participants would use in pricing the asset or
liability, not on assumptions specific to the Company. A three-tier
fair value hierarchy is established as a basis for considering such
assumptions and for inputs used in the valuation methodologies in
measuring fair value. The hierarchy prioritizes the inputs into
three levels based on the extent to which inputs used in measuring
fair value are observable in the market. Each fair
value measurement is reported in one of the three levels which
is determined by the lowest level input that is significant to the
fair value measurement in its entirety. These levels are:
Level 1 — Use unadjusted quoted prices in active markets for
identical assets or liabilities.
Level 2 — Use observable inputs other than Level 1 prices
such as quoted prices for identical or similar instruments in
markets that are not active, quoted prices for similar instruments
in active markets, and model-based valuation in which all
significant inputs are observable or can be corroborated by
observable market data for substantially the full term of the
assets or liabilities.
Level 3 — Use inputs that are generally unobservable and
reflect the use of significant management judgments and
estimates.
See Note 20, “Fair Value Measurement”, for the related
disclosure. |
| Cash Equivalents | Cash Equivalents
The Company considers all highly liquid instruments acquired with a
remaining maturity of three months or less when purchased to be
cash equivalents. In addition, time deposits with maturities
ranging from more than three months to one year are considered
qualified as cash equivalents as the nature of the time deposits
are similar to cash such that without advance notice to the bank,
they can be readily converted into known amounts of cash with the
principal of the time deposits protected and not subject to penalty
in the event of an early withdrawal. Also, the risk of changes in
value because of changes in interest rates is insignificant due to
the fact that the Company can still earn interest based on a rate
close to the on-going published interest rate applicable for the
actual period of the time deposits in the event of an early
withdrawal. Cash and cash equivalents are stated at cost, which
approximates their fair value. |
| Short-term Investments | Short-term Investments
The Company’s short-term investments primarily includes
short-term income yielding investments with original maturities
greater than three months from the purchase date and remaining
maturities less than one year. These short-term investments consist
mostly of bond funds and principal protected notes that are bought
and held principally for the purpose of selling them in the near
term and are classified as trading securities as well as senior
notes classified as held-to-maturity investment with maturities
less than one year. Trading securities are reported at fair value
with the subsequent changes in fair value recorded in earnings as
unrealized gains and losses. Senior notes are measured at amortized
cost using the effective interest method less any impairment. |
| Allowance for Doubtful Receivables | Allowance for Doubtful Receivables
An allowance for doubtful receivables is provided based on a review
of the collectability of accounts receivables. The Company
determines the amount of allowance for doubtful receivables by
examining the historical collection experience and current trends
in the credit quality of its customers as well as its internal
credit policies. |
| Inventories | Inventories
Inventories are stated at the lower of cost or market value.
Inventories are recorded at standard cost and adjusted to the
approximate weighted-average cost at the balance sheet date. Market
value represents the current replacement cost for raw materials,
work in process and finished goods. The Company assesses its
inventory for estimated obsolescence or unmarketable inventory
based upon management’s assumptions about future demand and
market conditions. In estimating reserves for obsolescence, the
Company primarily evaluates estimates based on the timing of the
introduction of new products and the quantities remaining of old
products and provides reserves for inventory on hand in excess of
the estimated demand. Estimated losses on slow-moving items are
recognized and included in the allowance for losses. |
| Long-term Investments | Long-term Investments
The Company has long-term investments in companies that it does not
exercise significant influence and accounts for these investments
under the cost method. Management regularly evaluates financial
information related to these investments to determine whether an
other than temporary decline in their value exists. Factors
indicative of an other than temporary decline include recurring
operating losses, credit defaults and subsequent rounds of
financings at an amount below the cost basis of the investment.
Management periodically weighs all quantitative and qualitative
factors in determining if any impairment loss exists. When a
decline in value is deemed to be other-than-temporary, the Company
recognizes an impairment loss in other income and expense. |
| Noncurrent Assets Held for Sale | Noncurrent Assets Held for Sale
Non-current assets are presented separately as held for sale when
the Company is committed to selling the asset, an active plan of
sale has commenced, and the sale is expected to be completed within
12 months. Assets held for sale are measured at the lower of their
carrying amount and fair value less cost to sell. Assets held for
sale are no longer amortized or depreciated. |
| Property and Equipment | Property and Equipment
Property and equipment are stated at cost less accumulated
depreciation. Significant additions, renewals and betterments are
capitalized, while maintenance and repairs are expensed as
incurred.
Depreciation is computed using the straight-line method over
estimated useful lives that range as follows: buildings — 25
to 50 years; machinery and equipment — 3 to 6 years;
furniture and fixtures — 3 to 8 years; software —
1 to 5 years; leasehold and buildings improvement — the
shorter of the estimated useful life or lease term, which is
generally 2 to 6 years. Depreciation expense recognized for the
years ended December 31, 2014, 2015 and 2016 was approximately
US$6,917 thousand, US$7,936 thousand and US$9,482 thousand,
respectively.
Upon the sale or other disposal of property and equipment, the
related cost and accumulated depreciation are removed from the
accounts, and any gain or loss is credited or charged to operating
income. |
| Government Grants | Government Grants
Grants received by the Company from the Korean government to assist
with specific research and development activities are deducted from
those research and development costs incurred, in the period in
which the related expenses are incurred, to the extent that they
are non-refundable. Government grants that were used for the
acquisition of fixed assets are deducted from the acquisition costs
of the acquired assets and amortized over the useful lives of the
related assets. The Company recognizes refundable government grants
as long-term payable and current portion of long-term payable on
its consolidated balance sheet. |
| Goodwill and Intangible Assets | Goodwill and Intangible Assets
Goodwill is the excess of the purchase price paid over the fair
value of the net tangible and intangible assets acquired in a
business combination. Intangible assets, which consist primarily of
development technology, are amortized over their estimated useful
lives, of 3.5 to 4.5 years. |
| Impairment of Goodwill and Long-Lived Assets | Impairment of Goodwill and Long-Lived Assets
The Company evaluates the recoverability of long-lived assets
whenever events or changes in circumstances indicate the carrying
value may not be recoverable. The determination of recoverability
is based on an estimate of undiscounted cash flows expected to
result from the use of an asset and its eventual disposition. The
estimate of cash flows is based upon, among other things, certain
assumptions about expected future operating performance, growth
rates and other factors. Estimates of undiscounted cash flows may
differ from actual cash flows due to, among other things,
technological changes, economic conditions, changes to the business
model or changes in operating performance. If the sum of the
undiscounted cash flows is less than the carrying value, an
impairment loss is recognized, measured as the amount by which the
carrying value exceeds the fair value of the asset. Fair value is
determined by reference to quoted market prices, if available, or
discounted cash flows, as appropriate. See Note 11, “Goodwill
and Acquired Intangible Assets,” regarding impairment testing
in fiscal year 2014, 2015 and 2016.
The Company monitors the recoverability of goodwill recorded in
connection with acquisitions, by reporting unit, annually, or
sooner if events or changes in circumstances indicate that the
carrying amount may not be recoverable. The Company conducts its
annual impairment test of goodwill on November 30. Reporting
units may be operating segments as a whole or an operation one
level below an operating segment, referred to as a component.
Goodwill impairment is tested using a two-step approach. The first
step compares the fair value of a reporting unit to its carrying
amount, including goodwill. If the fair value of the reporting unit
is greater than its carrying amount, goodwill is not considered
impaired and the second step is not required. If the fair value of
the reporting unit is less than its carrying amount, the second
step of the impairment test measures the amount of the impairment
loss, if any, by comparing the implied fair value of goodwill to
its carrying amount. If the carrying amount of goodwill exceeds its
implied fair value, an impairment loss is recognized equal to that
excess. The implied fair value of goodwill is calculated in the
same manner that goodwill is calculated in a business combination,
whereby the fair value of the reporting unit is allocated to all of
the assets and liabilities of that unit, with the excess purchases
price over the amounts assigned to assets and liabilities.
Estimating fair value is performed by utilizing various valuation
approaches, such as income approach or market approach. The total
of all reporting unit fair values was also compared to the
Company’s market capitalization plus control premium for
reasonableness. See Note 11, “Goodwill and Acquired
Intangible Assets,” regarding impairment testing. |
| Other Assets | Other Assets
Other assets primarily consist of industrial property right and
deposits for office leases. |
| Restricted Assets | Restricted Assets
Restricted assets consist of deposits required for litigation and
restricted cash. Restricted cash represents cash set aside as
collateral for obtaining capacity and borrowings as well as cash
received from government grants with restriction on its usage. |
| Bank loans | Bank loans
Loans from financial institutions are stated at the amount of
unpaid principal. Bank loans comprise borrowings which are held by
banks based in Taiwan. |
| Other long-term liabilities | Other long-term liabilities
Other long-term liabilities primarily consist of payable to former
shareholders of Shannon Systems and unrecognized tax benefit. |
| Pension Costs | Pension Costs
For employees under defined contribution pension plans, pension
costs are recorded based on the actual contributions made to
employees’ individual pension accounts. For employees under
defined benefit pension plans, pension costs are recorded based on
actuarial calculations. |
| Revenue Recognition | Revenue Recognition
Revenue from product sales is generally recognized upon shipment to
the customer provided that the Company has received a signed
purchase order, the price is fixed or determinable, transfer of
title has occurred in accordance with the shipping terms specified
in the arrangement with the customer, collectibility from the
customer is considered reasonably assured, product returns are
reasonably estimable and there are no remaining significant
obligations or customer acceptance requirements. Revenue on
development service orders is generally recognized upon completion
and customer acceptance of contractually agreed milestones.
The Company grants certain distributors limited rights of return
and price protection rights on unsold products. The return rights
are generally limited to five percent of the monetary value of
products purchased within the preceding six months, provided that
the distributor places a corresponding restocking order of equal or
greater value. An allowance for sales returns for distributors and
all customers is recorded at the time of sale based on historical
returns information available, management’s judgment and any
known factors at the time the financial statements are prepared
that would significantly affect the allowance. Price protection
rights are based on the inventory products the distributors have on
hand at the date the price protection is offered. A reserve for
price adjustments is recorded based on the estimated products on
hand at the distributors and historical experience. The actual
price adjustments to distributors incurred by the Company are
minimal.
The Company provides a warranty period of one year for
manufacturing defects of its products. Warranty returns have been
infrequent and relate to defective or off-specification parts. The
Company estimates a reserve for warranty based on historical
experience and records this amount to cost of sales. For the years
ended December 31, 2014, 2015 and 2016, the Company did not
experience significant costs associated with warranty returns. |
| Research and Development | Research and Development
Research and development costs consist of expenditures incurred
during the course of planned research and investigation aimed at
the discovery of new knowledge that will be useful in developing
new products or at significantly enhancing existing products as
well as expenditures incurred for the design and testing of product
alternatives. All expenditures related to research and development
activities of the Company are charged to operating expenses when
incurred. Third-party research and development costs are expensed
when the contracted work has been performed or as milestone results
have been achieved. |
| Income Taxes | Income Taxes
The provision for income tax represents income tax paid and payable
for the current year plus changes in the deferred income tax assets
and liabilities during the years. Deferred income tax assets are
recognized for net operating loss carryforwards, research and
development credits, and temporary differences. The Company
believes that uncertainty exists regarding the realizability of
certain deferred income tax assets and, accordingly, has
established a valuation allowance for those deferred income tax
assets to the extent the realizability is not deemed to be more
likely than not. Deferred income tax assets and liabilities are
measured using enacted tax rates.
The Company utilizes a two step approach to recognizing and
measuring uncertain tax positions. The first step is to evaluate
the tax position for recognition by determining if the weight of
available evidence indicates it is more likely than not that the
position will be sustained in a dispute with taxing authorities,
including resolution of related appeals or litigation processes, if
any. The second step is to measure the tax benefit as the largest
amount which is more than 50% likely of being realized upon
ultimate settlement. Changes in recognition or measurement are
reflected in the period in which the change in judgment occurs. The
Company records interest and penalties related to unrecognized tax
benefits in income tax expense. |
| Foreign Currency Transactions | Foreign Currency Transactions
Foreign currency transactions are recorded at the rates of exchange
in effect when the transaction occurs. Gains or losses, resulting
from the application of different foreign exchange rates when cash
in foreign currency is converted into the entities’
functional currency, or when foreign currency receivables and
payables are settled, are credited or charged to income in the
period of conversion or settlement. At the balance sheet date,
assets and liabilities denominated in foreign currencies are
remeasured based on prevailing exchange rates and any resulting
gains or losses are credited or charged to income. |
| Translation of Foreign Currency Financial Statements | Translation of Foreign Currency Financial
Statements
The reporting currency of the Company is the U.S. dollars. The
functional currency of some of the Company’s subsidiaries is
the local currency of the respective entity. Accordingly, the
financial statements of the foreign subsidiaries were translated
into U.S. dollars at the following exchange rates: assets and
liabilities — current rate on the balance sheet date;
shareholders’ equity — historical rates; income and
expenses — average rate during the period. The resulting
translation adjustment is recorded as a separate component of
comprehensive income. |
| Comprehensive Income (Loss) | Comprehensive Income (Loss)
Comprehensive income and loss represents net income (loss) plus the
results of certain changes in shareholders’ equity during a
period from non-owner sources. The following table presents the
components of accumulated other comprehensive income (loss) as of
December 31, 2014, 2015 and 2016:
Year Ended December 31,
2014 Year Ended December 31,
2015 Year Ended December 31,
2016
US$ US$ US$
Foreign Defined Accumulated Foreign Defined Accumulated Foreign Defined Accumulated
Beginning balance 4,556 (461 ) 4,095 3,354 (849 ) 2,505 1,486 (853 ) 633
Current-period change (1,202 ) (388 ) (1,590 ) (1,868 ) (4 ) (1,872 ) (1,555 ) (110 ) (1,665 )
Ending balance 3,354 (849 ) 2,505 1,486 (853 ) 633 (69 ) (963 ) (1,032 ) |
| Legal Contingencies | Legal Contingencies
The Company is currently involved in various claims and legal
proceedings. Periodically, the Company reviews the status of each
significant matter and assesses the potential financial exposure.
If the potential loss from any claim or legal proceeding is
considered probable and the amount can be estimated, the Company
accrues a liability for the estimated loss. Because of
uncertainties related to these matters, accruals are based only on
the best information available at the time. As additional
information becomes available, the Company reassesses the potential
liability related to the pending claims and litigation and revises
these estimates as appropriate. Such revisions in the estimates of
the potential liabilities could have a material impact on the
results of operations and financial position. |
| Earnings Per Share | Earnings Per Share
Basic earnings per share are computed by dividing net earnings
attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the period. Diluted
earnings per share reflect the potential dilution that could occur
if stock options and other dilutive securities were exercised.
Dilutive securities are excluded from the computation of the
diluted income per share in periods when their effect is
anti-dilutive. The Company’s dilutive securities consist of
employee stock options and restricted stock units. The effect of
dilutive securities including employee stock options and restricted
stock units were 2,183 thousand shares (546 thousand ADSs),
1,534 thousand shares (384 thousand ADSs) and
1,131 thousand shares (283 thousand ADSs) for the years ended
December 31, 2014, 2015 and 2016, respectively. |
| Stock-Based Compensation | Stock-Based Compensation
The Company accounts for stock-based compensation in accordance
with ASC 718 Compensation — Stock Compensation. The Company
uses the Black-Scholes valuation model for the valuation of stock
options and recognizes compensation expense on a straight-line
basis over the requisite service period of the award. The value of
our restricted stock units is based on the fair value of our shares
on the date of grant and expensed over the vesting period.
Prior to the initial declaration of a quarterly cash dividend on
January 22, 2013, the fair value of restricted stock units
(“RSUs”) was measured based on the grant date share
price, as the Company did not historically pay cash dividends on
our common stock. For awards granted on or subsequent to
January 22, 2013, the fair value of RSUs was measured based on
the grant date share price, less the present value of expected
dividends during the vesting period, discounted at a risk-free
interest rate. |
| Dividends | Dividends
Our Board of Directors declared payment of our first quarterly
dividend on our common stock in January 2013 and the first dividend
payment was made on March 4, 2013. Our Board of Directors has
subsequently declared and paid dividends in each successive
quarter. On November 2, 2015 and October 24, 2016, our
Board of Directors, instead of declaring a quarterly dividend,
declared an annual dividend payable in four quarterly installments.
The payment of future cash dividends are subject to the
Board’s continuing determination that the payment of
dividends are in the best interests of the Company’s
shareholders and are in compliance with all laws and agreements of
the Company applicable to the declaration and payment of cash
dividends. |
| Recent Accounting Pronouncements | Recent Accounting Pronouncements
In May 2014, the FASB issued a new standard related to revenue
recognition. Under the new standard, recognition of revenue occurs
when a customer obtains control of promised goods or services in an
amount that reflects the consideration to which the entity expects
to be entitled in exchange for those goods or services. In
addition, the new standard requires disclosure of the nature,
amount, timing, and uncertainty of revenue and cash flows arising
from contracts with customers. In August 2015, the FASB issued an
amendment to defer the effective date. The new standard is
effective for fiscal years beginning after December 15, 2017
and early adoption is permitted for annual reporting periods
beginning after December 15, 2016. In March and April 2016,
the FASB issued two accounting updates to clarify the
implementation guidance on principal versus agent considerations,
performance obligations and the licensing. In addition, the FASB
issued another accounting update in May 2016 to address
narrow-scope improvements to the guidance on collectability,
noncash consideration, and completed contracts at transition and
provides a practical expedient for contract modifications at
transition. The new guidance is required to be applied
retrospectively to each prior reporting period presented or
retrospectively with the cumulative effect of initially applying it
recognized at the date of initial application. The Company is
currently evaluating this guidance, but does not expect the
adoption to have a material effect on the Company’s
consolidated financial statements.
In August 2014, the FASB issued new standard related to the
presentation of financial statements when there may be conditions
or events that raise substantial doubt about the entity’s
ability to continue as a going concern. This standard sets forth
management’s responsibility to evaluate, each reporting
period, whether there is substantial doubt about our ability to
continue as a going concern, and if so, to provide related footnote
disclosures. The standard is effective for fiscal years beginning
after December 15, 2016 and early adoption is permitted. The
adoption of this guidance is not expected to have a material impact
on the Company’s results of operations, financial position or
cash flow.
In February 2015, the FASB issued an accounting update to amend the
consolidation analysis. All legal entities are subject to
reevaluation under the revised consolidation model. The amendment
is effective for fiscal years beginning after December 15,
2015 and early adoption is permitted. The adoption of this
amendment did not have a material impact on the Company’s
results of operations, financial position or cash flow.
In April 2015, the FASB issued an accounting update regarding the
measurement date of a defined benefit obligation and plan assets.
The amendment permits the entity with a fiscal year-end that does
not coincide with a month-end to measure defined benefit plan
assets and obligations using the month-end that is closest to the
entity’s fiscal year-end. If a contribution or significant
event (such as a plan amendment, settlement, or curtailment that
calls for a remeasurement in accordance with existing requirements)
occurs between the month-end date used to measure defined benefit
plan assets and obligations and an entity’s fiscal year-end,
the entity should adjust the measurement of defined benefit plan
assets and obligations to reflect the effects of those
contributions or significant events. This amendment is effective
for fiscal years beginning after December 15, 2016 and early
application is permitted. The adoption of this amendment is not
expected to have a material impact on the Company’s results
of operations, financial position or cash flow.
In May 2015, the FASB issued an accounting update regarding
disclosures for investments that calculate net asset value per
share. The amendment removes the requirement to categorize within
the fair value hierarchy all investments for which fair value is
measured using the net asset value per share practical expedient.
Instead, an entity is required to include those investments as a
reconciling line item so that the total fair value amount of
investments in the disclosure is consistent with the amount on the
balance sheet. Further, the amendment removes the requirement to
make certain disclosures for all investments that are eligible to
be measured at fair value using the net asset value per share
practical expedient. Rather, those disclosures are limited to
investments for which the entity has elected to measure the fair
value using the practical expedient. The amendment is effective for
fiscal years beginning after December 15, 2015. The amendment
must be applied retrospectively and early adoption is permitted.
The adoption of this amendment did not have a material impact on
the Company’s financial statement disclosure.
In July 2015, the FASB issued an accounting update to simplify the
measurement of inventory. The amendment requires the measurement of
inventory at the lower of cost and net realizable value. Net
realizable value is the estimated selling prices in the ordinary
course of business, less reasonably predictable costs of
completion, disposal, and transportation. The amendment applies to
inventories for which cost is determined by methods other than the
last-in first-out and the retail inventory methods. This amendment
is effective prospectively for annual periods beginning after
December 15, 2016 and early application is permitted. The
adoption of this amendment is not expected to have a material
impact on the Company’s results of operations, financial
position or cash flow.
In September 2015, the FASB issued an accounting update regarding
simplifying the accounting for measurement period adjustments
attributable to an acquisition. The amendment requires an acquirer
must recognize adjustments to provisional amounts that are
identified during the measurement period in the reporting period in
which the adjustment amounts are determined. The adjustments should
reflect the impact on earnings of changes in depreciation,
amortization, or other income effects, if any, as if the accounting
had been completed as of the acquisition date. Additionally,
amounts recorded in the current period that would have been
reflected in prior reporting periods if the adjustments had been
recognized as of the acquisition date must be disclosed either on
the face of the income statement or in the notes to financial
statements. This amendment is effective prospectively for annual
periods beginning after December 15, 2015 and early
application is permitted. The adoption of this guidance did not
have a material effect on the Company’s financial condition,
results of operations, cash flow and financial statement
disclosures.
In November 2015, the FASB issued an accounting update to simplify
the presentation of deferred income taxes. The amendment requires
that deferred tax liabilities and assets be classified as
noncurrent in a classified statement of financial position. The
current requirement that deferred tax liabilities and assets of a
tax-paying component of an entity be offset and presented as a
single amount is not affected by the amendments in this guidance.
This amendment is effective prospectively or retrospectively for
annual periods beginning after December 15, 2016 and early
application is permitted. The Company elected to have an early
adoption of the amendment as of December 31, 2015 and the
adoption of this amendment did not have a material impact on the
Company’s financial position.
In February 2016, the FASB issued a new standard regarding leases.
The new standard requires an entity to recognize assets and
liabilities arising from a lease for both financing and operating
leases other than that the entity elects the short-term lease
recognition and measurement exemption. Qualitative and quantitative
disclosures will be enhanced to better understand the amount,
timing and uncertainty of cash flows arising from leases. This
standard is effective for fiscal years beginning after
December 15, 2018, and early adoption is permitted. The
Company is in the process of evaluating this guidance to determine
the impact it will have on the consolidated financial
statements.
In March 2016, the FASB issued an accounting update to simplify
several aspects of the accounting for share-based payment award
transactions, including the income tax consequences, classification
of awards as either equity or liabilities, and classification on
the statement of cash flows. The amendment is effective for fiscal
years beginning after December 15, 2016, and earlier adoption
is permitted. The adoption of this amendment is not expected to
have a material impact on the Company’s financial position,
results of operations, cash flow and financial statement
disclosures.
In June 2016, the FASB issued an accounting update to amend the
guidance on the impairment of financial instruments that are not
measured at fair value through profit and loss. The amendment
introduces a current expected credit loss (CECL) model based on
expected losses rather than incurred losses to estimate credit
losses on financial instruments measured at amortized cost and
requires a broader range of reasonable and supportable information
to estimate expected credit loss. In addition, under the amendment,
an entity recognizes an allowance for expected credit losses on
financial instruments measured at amortized cost and
available-for-sale debt securities rather than the current
methodology of delaying recognition of credit losses until it is
probable a loss has been incurred. The amendment is effective for
fiscal years beginning after December 15, 2019, and earlier
adoption is permitted as of the fiscal years beginning after
December 15, 2018. The adoption of the amendments is not
expected to have a material impact on the Company’s statement
of cash flows.
In August 2016, the FASB issued an accounting update to clarify the
following eight cash flow classification issues: (1) debt
prepayment or debt extinguishment costs, (2) settlement of
zero-coupon debt instruments or other debt instruments with coupon
interest rates that are insignificant in relation to the effective
interest rate of the borrowing, (3) contingent consideration
payments made after the acquisition date of a business combination,
(4) proceeds received from the settlement of insurance claims,
(5) proceeds received from the settlement of corporate-owned
life insurance policies, including bank-owned life insurance
policies, (6) distributions received from equity method
investees, (7) beneficial interests in securitization
transactions, and (8) separately identifiable cash flows and
application of the predominance principle. The amendment is an
improvement to reduce the current and potential future diversity in
practice. The amendment is effective for fiscal years beginning
after December 15, 2017, and earlier adoption is permitted. In
addition, the amendment should be applied using a retrospective
transition method to each period presented. The Company is
currently evaluating the impact that the adoption will have on its
statement of cash flows.
In October 2016, the FASB issued an accounting update to simplify
the accounting for the income tax consequences of intra-entity
transfers of assets other than inventory. The amendment removes the
prohibition against the recognition of current and deferred income
tax effects of intra-entity transfers of assets other than
inventory until the asset has been sold to an outside party. The
amendment is effective for fiscal years beginning after
December 15, 2017, and earlier adoption is permitted. The
adoption of this amendment is not expected to have a material
impact on the Company’s financial position, results of
operations, cash flow and financial statement disclosures.
In October 2016, the FASB issued an accounting update to amend the
consolidation guidance on how a reporting entity that is the single
decision maker of a variable interest entity (“VIE”)
should treat indirect interests in the entity held through related
parties that are under common control with the reporting entity
when determining whether it is the primary beneficiary of that VIE.
Under this amendment, the single decision maker is required to
consider that indirect economic interests in the VIE held through
related parties that are under common control on a proportionate
basis. However, this amendment does not change the existing
characteristics of a primary beneficiary. The amendment is
effective for fiscal years beginning after December 15, 2016,
and earlier adoption is permitted. The adoption of this amendment
is not expected to have a material impact on the Company’s
financial position, results of operations, cash flow and financial
statement disclosures.
In November 2016, the FASB issued an accounting update related to
the classification and presentation of changes in restricted cash
on the statement of cash flows. The amendment requires restricted
cash or restricted cash equivalents should be included with cash
and cash equivalent when reconciling the beginning-of-period and
end-of-period total amounts shown on the statement of cash flows.
The amendment is effective for fiscal years beginning after
December 15, 2017, and early adoption is permitted. The
Company has elected to adopt the amendment as of December 31,
2016, and the retrospective transition approach is applied to prior
reporting periods presented. The adoption of this amendment did not
have a material impact on the Company’s financial
position.
The following table reflects the adjustments made to the
consolidated statements of cash flows to confirm prior period
classifications under the new guidance for the periods
presented:
As Adjustment As
US$ US$ US$
Year Ended December 31, 2013:
Net cash provided by operating activities 49,128
— 49,128
Net cash used in investing activities (12,815 ) 89 (12,726 )
Net cash used in financing activities (29,493 )
— (29,493 )
Net increase (decrease) in cash, cash equivalents, and restricted
cash* 6,820 89 6,909
Effect of exchange rate changes 166
— 166
Cash, cash equivalents, and restricted cash* at beginning of
year 154,734 17,775 172,509
Cash, cash equivalents, and restricted cash* at end of year 161,720 17,864 179,584
Year Ended December 31, 2014:
Net cash provided by operating activities 68,725
— 68,725
Net cash used in investing activities (15,413 ) 3,817 (11,596 )
Net cash used in financing activities (19,710 )
— (19,710 )
Net increase (decrease) in cash, cash equivalents, and restricted
cash* 33,602 3,817 37,419
Effect of exchange rate changes (1,111 )
— (1,111 )
Cash, cash equivalents, and restricted cash* at beginning of
year 161,720 17,864 179,584
Cash, cash equivalents, and restricted cash* at end of year 194,211 21,681 215,892
Year Ended December 31, 2015:
Net cash provided by operating activities 65,946
— 65,946
Net cash used in investing activities (58,414 ) (44 ) (58,458 )
Net cash used in financing activities (20,271 )
— (20,271 )
Net increase (decrease) in cash, cash equivalents, and restricted
cash* (12,739 ) (44 ) (12,783 )
Effect of exchange rate changes (953 )
— (953 )
Cash, cash equivalents, and restricted cash* at beginning of
year 194,211 21,681 215,892
Cash, cash equivalents, and restricted cash* at end of year 180,519 21,637 202,156
* The restricted cash is only included
in the amount of “as adjusted” item.
To early adopt the accounting update, the Company has amended the
presentation of changes in cash and cash equivalents by explaining
the changes in the total of cash, cash equivalents, and restricted
cash. The following table provides a reconciliation of cash, cash
equivalents, and restricted cash reported within the consolidated
balance sheets that sum to the total of the same such amounts shown
in the statement of cash flows.
As of December 31
2013 2014 2015 2016
US$ US$ US$ US$
Cash and cash equivalents 161,720 194,211 180,519 274,483
Restricted cash included in restricted assets-current 15,299 19,322 19,328 44,393
Restricted cash included in other assets 2,565 2,359 2,309 2,301
Total cash, cash equivalents, and restricted cash shown in the
statements of cash flows 179,584 215,892 202,156 321,177
Amounts included in restricted cash represent (a) cash and
time deposits set aside as collateral for obtaining capacity;
(b) cash received from government grants with restriction on
its usage; and (c) cash and time deposits that are pledged for
short-term loans.
In January 2017, the FASB issued an accounting update to clarify
the definition of a business to assist entities with evaluating
whether transactions should be accounted for as acquisitions (or
disposals) of assets or businesses. The amendment provides a screen
to determine when an integrated set of assets and activities
(collectively referred to as a “set”) is not a
business. The screen requires that when substantially all of the
fair value of the gross assets acquired (or disposed of) is
concentrated in a single identifiable asset or a group of similar
identifiable assets, the set is not a business. If the screen is
not met, the amendment requires that to be considered a business, a
set must include an input and a substantive process that together
significantly contribute to the ability to create output. The
amendment is effective for fiscal years beginning after
December 15, 2017. The Company is currently evaluating the
impact that the adoption will have on its results of operations,
financial position, cash flow and disclosures.
In January 2017, the FASB issued an accounting update to simplify
the accounting treatment for the impairment of goodwill. The
amendment eliminates Step 2 from the goodwill impairment test,
which measures a goodwill impairment loss by calculating the
implied fair value of goodwill by assigning the fair value of a
reporting unit to all of its assets and liabilities as if that
reporting unit had been acquired in a business combination.
Instead, under this amendment, the entity should recognize an
impairment charge for the amount by which the carrying amount
exceeds the reporting unit’s fair value and the impairment
loss recognized should not exceed the total amount of goodwill
allocated to that reporting unit. The amendment is effective for
fiscal years beginning after December 15, 2019, and early
adoption is permitted. The Company is currently evaluating the
impact that the adoption will have on its results of operations,
financial position, cash flow and disclosures. |
