| Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
| Dec. 31, 2018 |
| Accounting Policies [Abstract] | |
| Basis of Presentation | Basis of Presentation
The consolidated financial statements have been prepared in
accordance with 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 based upon payment history and the customer’s
current credit worthiness. 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 one customer
in 2016, and two customers in 2017 and 2018 accounted for 10% or
more of the Company’s net sales, and these sales represented
28%, 39% and 34% of the Company’s net sales in 2016, 2017 and
2018, respectively. In 2016, the significant customer was SK Hynix
and in 2017 and 2018, SK Hynix and Intel. The Company’s top
ten customers in 2016, 2017 and 2018 accounted for approximately
75%, 72% and 69% of net sales, respectively. |
| 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 in privately-held companies with no readily
determinable market value are recorded using the cost method, since
the cost of obtaining verifiable fair value is unreasonably high.
Upon adoption of Accounting Standard Update No. 2016-01,
Recognition and Measurement of Financial Assets and Financial
Liabilities (“ASU 2016-01”) starting
January 1, 2018, these investments are measured at cost less
impairment, if any, plus or minus any changes resulting from
observable price changes in orderly transactions for an identical
or similar investment of the same issuer. Any resulting change in
carrying amount would be reflected in net income. 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 21, “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 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 |
| Short-term Investments | Short-term Investments
The Company’s short-term investments primarily include
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 |
| 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
Investee companies over which the Company had the ability to
exercise significant influence but did not have a controlling
interest and was the primary beneficiary were accounted for using
the equity method. Significant influence was generally considered
to exist when the Company had an ownership interest in the voting
shares of the investee between 20% and 50%, and other factors, such
as representation in the investee’s board of directors,
voting rights and the impact of commercial arrangements, were
considered in determining whether the equity method of accounting
was appropriate. Under this method of accounting, the Company
recorded its proportionate share of the net earnings or losses of
equity method investees and a corresponding increase or decrease to
the investment balances. The Company evaluated its equity method
investments for impairment whenever events or changes in
circumstances indicated that the carrying amounts of such
investments might not be recoverable.
Prior to adopting ASU 2016-01 on January 1, 2018, 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. After
adopting ASU 2016-01 on January 1, 2018, the Company elected
to record equity investments without readily determinable fair
values and not accounted for by the equity method at cost less
impairment, adjusted for subsequent observable price changes
whether there are observable price changes in orderly transactions
for the identical or similar investment of the same issuer. |
| Noncurrent Assets Held for Sale | Noncurrent Assets Held for Sale
Non-current |
| 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. Land is not depreciated. Depreciation expense recognized for
the years ended December 31, 2016, 2017 and 2018 was
approximately US$9,482 thousand, US$10,599 thousand and
US$11,832 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. |
| 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 5.5 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 2016, 2017 and 2018.
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. Prior to
fiscal 2017, goodwill impairment is tested using a two-step
In January 2017, the Financial Accounting Standards Board
(“FASB”) issued Accounting Standard Update
(“ASU”) 2017-04,
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 is 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 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
Revolver credit from financial institutions are stated at the
amount of unpaid principal. |
| Other long-term liabilities | Other long-term liabilities
Other long-term liabilities primarily consist of payables to former
shareholders of Shannon Systems and unrecognized tax benefits. |
| 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
Through the fiscal year ended December 31, 2017, revenue from
product sales was generally recognized upon shipment to the
customer provided that the Company had received a signed purchase
order, the price was fixed or determinable, transfer of title had
occurred in accordance with the shipping terms specified in the
arrangement with the customer, collectability from the customer was
considered reasonably assured, product returns were reasonably
estimable and there were no remaining significant obligations or
customer acceptance requirements. Revenue on development service
orders was generally recognized upon completion and customer
acceptance of contractually agreed milestones.
As a result of the adoption of the new revenue standard (ASC 606)
on January 1, 2018, using the modified retrospective method
with the cumulative effect of initially applying it recognized at
the date of initial application, the Company revised its revenue
recognition policy. The Company now recognizes revenue upon
transfer of control of promised products or services to customers
in an amount that reflects the consideration the Company expects to
receive in exchange for those products or services. Under the new
revenue recognition standard, the Company applies the following
five step approach: (1) identify the contract with a customer,
(2) identify the performance obligations in the contract,
(3) determine the transaction price, (4) allocate the
transaction price to the performance obligations in the contract,
and (5) recognize revenue when a performance obligation is
satisfied.
The Company enters into contracts that may include products that
are capable of being distinct and accounted for as separate
performance obligations. To date, the majority of the revenue has
been generated by sales associated with products of storage and
mobile communication, where a single performance obligation is
identified in general. Revenue from services has been
insignificant. Performance obligations associated with product
sales transactions are generally satisfied when control passes to
customers upon shipment or the written acceptance of the customers.
Accordingly, product revenue is recognized at a point in time when
control of the asset is transferred to the customer. The Company
recognizes revenue when it satisfies a performance obligation by
transferring control of a product to a customer in an amount that
reflects the consideration to which the entity expects to be
entitled in exchange for those goods. Some of the Company’s
sales are made to distributors. Control passes to the distributor
upon shipment, and terms and payment by the Company’s
distributors is not contingent on resale of the product.
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. The actual price
adjustments to distributors incurred by the Company are
minimal.
The Company provides a standard one-year off-specification
The effect of retrospectively applying ASC 606 is detailed
below:
As previously New Revenue As Adjusted
Impact on Assets and liabilities
Refund liabilities $
— $ 2,093 $ 2,093
Allowance for sales returns and discounts* 2,093 (2,093 )
—
Total effect on Assets and liabilities $ 2,093 $
— $ 2,093
*
Prior to the application of ASC 606, the Company
recognized the estimation of sales returns and allowance as a
credit to accounts receivables. Under ASC 606, the Company
recognizes such estimation as refund liability. |
| 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
Year Ended
December 31, 2016 Year Ended
December 31, 2017 Year Ended
December 31, 2018
US$ US$ US$
Foreign Defined Accumulated Foreign Defined Accumulated Foreign Defined Accumulated
Beginning balance 1,486 (853 ) 633 (69 ) (963 ) (1,032 ) 3,321 (678 ) 2,643
Current-period change (1,555 ) (110 ) (1,665 ) 3,390 285 3,675 (2,148 )
— (2,148 )
Ending balance (69 ) (963 ) (1,032 ) 3,321 (678 ) 2,643 1,173 (678 ) 495 |
| Legal Contingencies | Legal Contingencies
The Company is regularly 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 1,131 thousand shares (283 thousand
ADSs), 868 thousand shares (218 thousand ADSs) and
389 thousand shares (97 thousand ADSs) for the years
ended December 31, 2016, 2017 and 2018, 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. |
| Treasury Stock | Treasury Stock
Treasury stock is stated at cost and shown as a reduction to
shareholders’ equity. A repurchase of ADSs is recorded as
treasury stock until the Company completes the withdrawal of the
underlying ordinary shares from the ADS program. |
| Dividends | Dividends
The 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. The board of directors has
subsequently declared and paid dividends in each successive
quarter. Beginning on November 2, 2015, the 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 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 adopted this new standard using
the modified retrospective method with the cumulative effect of
initially applying it recognized at the date of initial
application. The adoption of this new standard did not have a
material impact on the Company’s financial position, results
of operations, cash flow and financial statement disclosures.
In January 2016, the FASB issued an accounting update regarding the
subsequent measurement of equity investment. The amendment requires
all equity investment to be measured at fair value with changes in
the fair value recognized through net income other than those
accounted for under equity method of accounting or those that
result in consolidation of the investee. The amendment also
simplifies the impairment assessment of equity investments without
readily determinable fair value by requiring assessment for
impairment qualitatively and eliminating the complexity of the
other-than-temporary impairment guidance. For financial reporting,
the amendment requires an entity to present separately in other
comprehensive income the portion of the total change in the fair
value of a liability resulting from a change in the
instrument-specific credit risk when the entity has elected to
measure the liability at fair value in accordance with the fair
value option for financial instruments. In addition, the amendment
eliminates the requirement to disclose the methods and significant
assumptions used to estimate the fair value that is required to be
disclosed for financial instruments measured at amortized cost on
the balance sheet. In February 2018, the FASB issued an accounting
update to further clarify certain aspects of the guidance in the
recognition and the measurement of financial assets and financial
liabilities. The amendments are effective for fiscal years
beginning after December 15, 2017 and early application is
prohibited. The adoption of this amendment did not have a material
impact on the Company’s financial position, results of
operations, cash flow and financial statement disclosures.
In February 2016, the FASB issued a new standard regarding leases
(Topic 842). 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.
In January 2018, the FASB issued an amendment permits an entity to
elect an optional transition practical expedient to not evaluate
under Topic 842 land easements that exist or expired before the
entity’s adoption of Topic 842 and that were not previously
accounted for as leases under Topic 840, the current standard
regarding leases. In July 2018, the FASB issued two amendments to
(1) clarify how to apply certain aspects of the new leases
standard addressing the rate implicit in the lease, lessee
reassessment of lease classification, lessor reassessment of lease
term and purchase options, among other issues; (2) provide an
optional transition method that allows the entity to initially
apply the new lease requirements by recognizing a cumulative-effect
adjustment to the opening balance of retained earnings in the
period of adoption without restating prior periods; and
(3) provide an practical expedients that lease and associated
non-lease non-lease right-of-use
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
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
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 did not 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 end-of-period
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 adoption of this amendment did not have
a material impact on the Company’s financial position,
results of operations, cash flow and financial statement
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 adopted this amendment beginning
in fiscal 2017 and performed the annual goodwill impairment test in
accordance with the amended guidance. Refer to Note 11 for
discussion of the annual goodwill impairment test.
In February 2017, the FASB issued an accounting update to clarify
the scope of asset derecognition guidance and accounting for
partial sales of nonfinancial assets. The amendment defines the
term “in substance nonfinancial asset” as a financial
asset promised to counterparty in a contract if substantially all
of the fair value of assets (recognized and unrecognized) that are
promised to the counterparty in the contract is concentrated in
nonfinancial assets and clarifies that an entity should identify
each distinct nonfinancial asset or in substance nonfinancial asset
promised to a counterparty and derecognize each asset when a
counterparty obtains control of it. The amendment also clarifies
that an entity should allocate consideration to each distinct asset
by applying the guidance in Topic 606 on allocating the transaction
price to performance obligations. Under this amendment, an entity
is required to derecognize a distinct nonfinancial asset or
distinct in substance nonfinancial asset in a partial sale
transaction when it (1) does not have (or ceases to have) a
controlling financial interest in the legal entity that holds the
asset in accordance with Topic 810 and (2) transfers control
of the asset in accordance with Topic 606. Once an entity transfers
control of a distinct nonfinancial asset or distinct in substance
nonfinancial asset, it is required to measure any noncontrolling
interest it receives (or retains) at fair value. The amendment is
effective for fiscal years beginning after December 15, 2017
and early adoption is permitted. The amendment should be applied on
a full or modified retrospective basis. The adoption of this
amendment did not have a material impact on the Company’s
financial position, results of operations, cash flow and financial
statement disclosures.
In March 2017, the FASB issued an accounting update to improve the
presentation of net periodic pension cost and net periodic
postretirement benefit cost. The amendment requires that an entity
disaggregates the service cost component from the other components
of net benefit cost and present the service cost component with
other current compensation costs for related employees in the
income statement. The amendment also requires an entity presents
the other components elsewhere in the income statement and outside
of income from operation if such subtotal is presented and allow
only the service cost component of net benefit cost to be eligible
for capitalization. The amendment is effective for fiscal years
beginning after December 15, 2017 and early adoption is
permitted. The amendment should be applied retrospectively for the
presentation of the service cost component and the other components
of net periodic pension cost and net periodic postretirement
benefit cost in the income statement and prospectively, on and
after the effective date, for the capitalization of the service
cost component of net periodic pension cost and net periodic
postretirement benefit in assets. The amendment allows for a
practical expedient that permits an entity to use the amounts
disclosed in its pension and other postretirement benefit plan note
for the prior comparative periods as the estimation basis for
applying the retrospective presentation requirements. The Company
intends not to apply the practical expedient for retrospective
presentation requirements. The adoption of this amendment did not
have a material impact on the Company’s financial position,
results of operations, cash flow and financial statement
disclosures.
In May 2017, the FASB issued an accounting update to provide
clarity and reduce both (1) diversity in practice and
(2) cost and complexity when applying the guidance in Topic
718, Compensation — Stock Compensation, to a change in the
terms or conditions of a share-based payment award. Under the
amendment, modification accounting is required to be applied unless
all of the following are the same immediately before and after the
change: (1) the award’s fair value (or calculated value
or intrinsic value, if those measurement methods are used); (2) the
award’s vesting conditions; and (3) the award’s
classification as an equity or liability instrument. The amendment
is effective for fiscal years beginning after December 15,
2017 and early adoption is permitted. The amendment should be
applied prospectively to an award modified on or after the adoption
date. The adoption of this amendment did not have a material impact
on the Company’s financial position, results of operations,
cash flow and financial statement disclosures.
In August 2018, the FASB issued an accounting update to amend fair
value measurement disclosure requirements to eliminate, add and
modify certain disclosures to improve the effectiveness of such
disclosure. The amendments removed (1) the disclosure
requirements for transfers between Levels 1 and 2 of the fair value
hierarchy, (2) the policy for timing of transfers between
levels of the fair value hierarchy; and (3) the valuation
processes for Level 3 fair value measurements. Additionally,
the amendments modified the disclosure requirements for investments
in certain entities that calculate net asset value and measurement
uncertainty. Finally, the amendments added disclosure requirements
for the changes in unrealized gains and losses included in other
comprehensive income for recurring Level 3 fair value
measurements and the range and weighted average of significant
unobservable inputs used to develop Level 3 measurements. The
amendments on changes in unrealized gains and losses, the range and
weighted average of significant unobservable inputs used to develop
Level 3 fair value measurements and the narrative description
of measurement uncertainty should be applied prospectively for only
the most recent interim or annual period presented in the initial
fiscal year of adoption. All other amendments should be applied
retrospectively to all periods presented upon their effective date.
This amendment is effective for annual periods beginning after
December 15, 2019. Early 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 August 2018, the FASB issued an accounting update to modify
disclosure requirements by removing, modifying and clarifying
disclosures related to defined benefit plans. This amendment
modified the disclosure requirements for employers that sponsor
defined benefit pension or other postretirement plans. Certain
disclosure requirements have been removed while the disclosure
requirements of (1) the weighted-average interest crediting
rates for cash balance plans and other plans with promised interest
crediting rates; and (2) an explanation of the reasons for
significant gains and losses related to changes in the benefit
obligation for the period, have been added. The amendment also
clarified the disclosure requirements with respect to the projected
benefit obligation and the accumulated benefit obligation. The
amendment is effective for fiscal years ending after
December 15, 2020. Early adoption is permitted. The amendments
should be applied on a retrospective basis to all periods
presented. 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. |
