Accounting Policies, by Policy (Policies) | 12 Months Ended |
Dec. 31, 2014 |
Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Basis of presentation |
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Tekmira Pharmaceuticals Corporation was incorporated on October 6, 2005 as an inactive wholly owned subsidiary of Inex Pharmaceuticals Corporation (“Inex”). Pursuant to a “Plan of Arrangement” effective April 30, 2007 the business and substantially all of the assets and liabilities of Inex were transferred to the Company. The consolidated financial statements for all periods presented herein include the consolidated operations of Inex until April 30, 2007 and the operations of the Company thereafter. |
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The Company has three wholly-owned subsidiaries: Protiva Biotherapeutics Inc. (“Protiva”), Protiva Biotherapeutics (USA) Inc. (“Protiva USA”), and Protiva Agricultural Development Company Inc. (“PADCo”). Protiva and Protiva USA were acquired on May 30, 2008. PADCo was incorporated on January 9, 2014. |
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These consolidated financial statements include the accounts of the Company and two of its wholly-owned subsidiaries, Protiva and Protiva USA. All intercompany transactions and balances have been eliminated on consolidation. |
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The Company records its investment in PADCo using the equity method. The Company has determined that PADCo is a variable interest entity (“VIE”) of which it is not the primary beneficiary. The Company is not the primary beneficiary as it does not have the power to make decisions that most significantly affect the economic performance of the VIE nor does the Company have the right to receive benefits or the obligation to absorb losses that in either case could potentially be significant to the VIE. PADCo is described further in note 3. |
Reclassification, Policy [Policy Text Block] | Comparative Information |
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Certain information has been reclassified to conform with the financial statement presentation adopted for the current year. |
Use of Estimates, Policy [Policy Text Block] | Use of estimates |
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The preparation of the consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions about future events that affect the reported amounts of assets, liabilities, revenue, expenses, contingent assets and contingent liabilities as at the end or during the reporting period. Actual results could significantly differ from those estimates. Significant areas requiring the use of management estimates relate to recognition of revenue, stock-based compensation, valuation of warrant liability and financial instruments, and the amounts recorded as accrued liabilities. |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and cash equivalents |
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Cash and cash equivalents are all highly liquid instruments with an original maturity of three months or less when purchased. Cash equivalents are recorded at cost plus accrued interest. The carrying value of these cash equivalents approximates their fair value. |
Investment, Policy [Policy Text Block] | Short-term investments |
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The Company acquired guaranteed investment certificates during the year, which are classified as short-term investments on the balance sheet. Short-term investments have original maturities exceeding three months, and have remaining maturities within twelve months. Short-term investments accrue interest daily based on a fixed interest rate for the term. The carrying value of these cash equivalents are recorded at cost plus accrued interest, which approximates their fair value. |
Fair Value Measurement, Policy [Policy Text Block] | Fair value of financial instruments |
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We measure certain financial instruments and other items at fair value. |
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To determine the fair value, we use the fair value hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use to value an asset or liability and are developed based on market data obtained from independent sources. Unobservable inputs are inputs based on assumptions about the factors market participants would use to value an asset or liability. The three levels of inputs that may be used to measure fair value are as follows: |
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| • | Level 1 inputs are quoted market prices for identical instruments available in active markets. | | | | | | | | | | | | | | | | | | | | | | |
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| • | Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly. If the asset or liability has a contractual term, the input must be observable for substantially the full term. An example includes quoted market prices for similar assets or liabilities in active markets. | | | | | | | | | | | | | | | | | | | | | | |
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| • | Level 3 inputs are unobservable inputs for the asset or liability and will reflect management’s assumptions about market assumptions that would be used to price the asset or liability. | | | | | | | | | | | | | | | | | | | | | | |
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Assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurements. Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. |
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The Company’s financial instruments consist of cash and cash equivalents, short-term investments, accounts receivable, accounts payable and accrued liabilities, warrants and financial instruments. |
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The carrying values of cash and cash equivalents, short-term investments, accounts receivable and accounts payable and accrued liabilities approximate their fair values due to the immediate or short-term maturity of these financial instruments. |
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As quoted prices for the warrants are not readily available, the Company has used a Black-Scholes pricing model, as described in note 5, to estimate fair value. These are level 3 inputs as defined above. |
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The Company used a discounted cash flow model to determine the fair value of the financial instrument related to Monsanto’s call option to acquire the equity or all of the assets of PADCo, as described in note 3. The fair value was determined at the date of recognition, and at each reporting date. The initial fair value of the financial instrument was nil, and there has been no change to its fair value as at December 31, 2014. These are level 3 inputs as defined above. |
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The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis, and indicates the fair value hierarchy of the valuation techniques used to determine such fair value: |
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| | Level 1 | | | Level 2 | | | Level 3 | | | 31-Dec-14 | | | | | | | | | |
Assets | | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents | | $ | 72,187 | | | | - | | | | - | | | $ | 72,187 | | | | | | | | | |
Guaranteed investment certificates | | | 39,974 | | | | - | | | | - | | | | 39,974 | | | | | | | | | |
Total | | $ | 112,161 | | | | - | | | | - | | | $ | 112,161 | | | | | | | | | |
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Liabilities | | | | | | | | | | | | | | | | | | | | | | | | |
Warrants | | | - | | | | - | | | $ | 5,099 | | | $ | 5,099 | | | | | | | | | |
Financial instrument | | | - | | | | - | | | | - | | | | - | | | | | | | | | |
Total | | | - | | | | - | | | $ | 5,099 | | | $ | 5,099 | | | | | | | | | |
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| | Level 1 | | | Level 2 | | | Level 3 | | | 31-Dec-13 | | | | | | | | | |
Assets | | | | | | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents | | $ | 68,717 | | | | - | | | | - | | | $ | 68,717 | | | | | | | | | |
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Liabilities | | | | | | | | | | | | | | | | | | | | | | | | |
Warrants | | | - | | | | - | | | $ | 5,379 | | | $ | 5,379 | | | | | | | | | |
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The following table presents the changes in fair value of the Company’s warrants: |
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| | Liability at beginning | | | Opening liability of | | | Fair value of | | | Increase in fair | | | Foreign exchange | | | Liability at end | |
of the period | warrants issued in | warrants exercised | value of warrants | (gain) loss | of the period |
| the period | in the period | | | |
Year ended December 31, 2012 | | $ | 202 | | | $ | 851 | | | $ | (881 | ) | | $ | 3,822 | | | $ | 21 | | | $ | 4,015 | |
Year ended December 31, 2013 | | $ | 4,015 | | | | - | | | $ | (1,854 | ) | | $ | 3,530 | | | $ | (312 | ) | | $ | 5,379 | |
Year ended December 31, 2014 | | $ | 5,379 | | | | - | | | $ | (10,208 | ) | | $ | 10,383 | | | $ | (455 | ) | | $ | 5,099 | |
Inventory, Policy [Policy Text Block] | Inventory |
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Inventory includes materials assigned for the manufacture of products for collaborative partners and manufacturing costs for products awaiting acceptance by collaborative partners. Inventory is carried at the lower of cost and net realizable value and measured using first-in-first-out method. The cost of inventories includes all costs of purchase, costs of manufacturing and other costs incurred in bringing the inventories to their present location and condition. |
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Materials purchased for the Company’s own research and development products are not recorded as inventory but are expensed as incurred. |
Property, Plant and Equipment, Policy [Policy Text Block] | Property and equipment |
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Property and equipment is recorded at cost less impairment losses, accumulated depreciation, related government grants and investment tax credits. The Company records depreciation using the straight-line method over the estimated useful lives of the capital assets as follows: |
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| Rate | | | | | | | | | | | | | | | | | | | | | |
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Laboratory equipment (years) | | 5 | | | | | | | | | | | | | | | | | | | | | | |
Computer and office equipment (years) | 2 | - | 5 | | | | | | | | | | | | | | | | | | | | | |
Furniture and fixtures (years) | | 5 | | | | | | | | | | | | | | | | | | | | | | |
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Leasehold improvements are depreciated over their estimated useful lives but in no case longer than the lease term, except where lease renewal is reasonably assured. Assets held under capital leases that do not allow for ownership to pass to the Company are depreciated using the straight-line method over their useful life, not exceeding the lease term. Assets under construction are not depreciated until usage has begun. |
Intangible Assets, Finite-Lived, Policy [Policy Text Block] | Intangible assets |
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The costs incurred in establishing and maintaining patents for intellectual property developed internally are expensed in the period incurred. |
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | Impairment of long-lived assets |
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If there is a major event indicating that the carrying value of property and equipment may be impaired then management will perform an impairment test and if the recoverable value, based on undiscounted future cash flows, exceeds carrying value then such assets are written down to their fair values. |
Revenue Recognition, Policy [Policy Text Block] | Revenue recognition |
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The Company earns revenue from research and development collaboration and contract services, licensing fees, milestone and royalty payments. Revenues associated with multiple element arrangements are attributed to the various elements based on their relative fair values or are recognized as a single unit of accounting when relative fair values are not determinable. Non-refundable payments received under collaborative research and development agreements are recorded as revenue as services are performed and related expenditures are incurred. Non-refundable upfront license fees from collaborative licensing and development arrangements are recognized as the Company fulfills its obligations related to the various elements within the agreements, in accordance with the contractual arrangements with third parties and the term over which the underlying benefit is being conferred. The Company evaluates new arrangements for any substantive milestones by considering: whether substantive uncertainty exists upon execution of the arrangement; if the event can only be achieved based in whole or in part on the Company’s performance, or occurrence of a specific outcome resulting from the Company’s performance; any future performance required, and payment is reasonable relative to all deliverables; and, the payment terms in the arrangement. Payments received upon the achievement of substantive milestones are recognized as revenue in their entirety. Payments received upon the occurrence of milestones that are non-substantive are deferred and recognized as revenue over the estimated period of performance applicable to the associated collaborative agreement. |
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Revenue earned under research and development manufacturing collaborations where the Company bears some or all of the risk of a product manufacturing failure is recognized when the purchaser accepts the product and there are no remaining rights of return. |
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Revenue earned under research and development collaborations where the Company does not bear any risk of product manufacturing failure is recognized in the period the work is performed. For contracts where the manufacturing amount is specified, revenue is recognized as product is manufactured in proportion to the total amount specified under the contract. |
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Revenue and expenses under the contract with the United States Government Department of Defense (“DoD”) are being recorded using the percentage-of-completion method. Contract progress is based on costs incurred to date. Expenses under the contract are recorded in the Company’s consolidated statement of operations and comprehensive income (loss) as they are incurred. Government contract revenues related to expenses incurred under the contract are recorded in the same period as those expenses. Expenses accrued under the contract but not yet invoiced are recorded in the Company’s balance sheet as accrued liabilities and accrued revenues. Equipment purchased under the contract is recorded on the Company’s balance sheet as deferred expense and deferred revenue and amortized, on a straight-line basis, over the life of the contract. |
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Cash or other compensation received in advance of meeting the revenue recognition criteria is recorded on the balance sheet as deferred revenue. Revenue meeting recognition criteria but not yet received or receivable is recorded on the balance sheet as accrued revenue. |
Lease, Policy [Policy Text Block] | Leases and lease inducements |
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Leases entered into are classified as either capital or operating leases. Leases which substantially transfer all benefits and risks of ownership of property to the Company are accounted for as capital leases. At the time a capital lease is entered into, an asset is recorded together with its related long-term obligation to reflect the purchase and financing. |
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All other leases are accounted for as operating leases wherein rental payments are expensed as incurred. |
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Lease inducements represent leasehold improvement allowances and reduced or free rent periods and are amortized on a straight-line basis over the term of the lease and are recorded as a reduction of rent expense. |
Research, Development, and Computer Software, Policy [Policy Text Block] | Research and development costs |
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Research and development costs, including acquired in-process research and development expenses for which there is no alternative future use, are charged as an expense in the period in which they are incurred. |
Earnings Per Share, Policy [Policy Text Block] | Income or loss per share |
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Income or loss per share is calculated based on the weighted average number of common shares outstanding. Diluted loss per share does not differ from basic loss per share for the years ended December 31, 2014 and 2013, since the effect of the Company’s stock options and warrants is anti-dilutive. Diluted income per share is calculated using the treasury stock method which uses the weighted average number of common shares outstanding during the period and also includes the dilutive effect of potentially issuable common shares from outstanding, in-the-money stock options and warrants. |
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The following table sets out the computation of basic and diluted net income (loss) per common share: |
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| | For the year ended December 31 | | | | | | | | | | | | | |
| | 2014 | | | 2013 | | | 2012 | | | | | | | | | | | | | |
Numerator: | | | | | | | | | | | | | | | | | | | | | |
Net income (loss) | | $ | (38,837 | ) | | $ | (14,063 | ) | | $ | 29,611 | | | | | | | | | | | | | |
Denominator: | | | | | | | | | | | | | | | | | | | | | | | | |
Weighted average number of common shares | | | 21,603,136 | | | | 15,302,680 | | | | 13,727,925 | | | | | | | | | | | | | |
Effect of dilutive securities: | | | | | | | | | | | | | | | | | | | | | | | | |
Warrants | | | - | | | | - | | | | 177,374 | | | | | | | | | | | | | |
Options | | | - | | | | - | | | | 415,515 | | | | | | | | | | | | | |
Diluted weighted average number of common shares | | | 21,603,136 | | | | 15,302,680 | | | | 14,320,814 | | | | | | | | | | | | | |
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Basic income (loss) per common share | | $ | (1.80 | ) | | $ | (0.92 | ) | | $ | 2.16 | | | | | | | | | | | | | |
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Diluted income (loss) per common share | | $ | (1.80 | ) | | $ | (0.92 | ) | | $ | 2.07 | | | | | | | | | | | | | |
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For the year ended December 31, 2014, potential common shares of 2,221,233 were excluded from the calculation of income per common share because their inclusion would be anti-dilutive (December 31, 2013 – 3,064,767; December 31, 2012 – 1,085,503). |
Government Grants And Refundable Investment Tax Credits [Policy Text Block] | Government grants and refundable investment tax credits |
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Government grants and tax credits provided for current expenses is included in the determination of income or loss for the year, as a reduction of the expenses to which it relates. Government grants and tax credits towards the acquisition of property and equipment is deducted from the cost of the related property and equipment. |
Foreign Currency Transactions and Translations Policy [Policy Text Block] | Foreign currency translation and change in reporting currency |
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The functional currency of the Company is the Canadian dollar. For the Company and its integrated subsidiaries (Protiva and Protiva USA), foreign currency monetary assets and liabilities are translated into Canadian dollars at the rate of exchange prevailing at the balance sheet date. Non-monetary assets and liabilities are translated at historical exchange rates. The previous month’s closing rate of exchange is used to translate revenue and expense transactions. Exchange gains and losses are included in income or loss for the period. |
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The Company is using United States dollars as its reporting currency. All assets and liabilities are translated using the exchange rate at the balance sheet date. Revenues, expenses and other income (losses) are translated using the average rate for the period, except for large transactions, for which the exchange rate on the date of the transaction is used. Equity accounts are translated using the historical rate. As the translation differences from the Company’s functional currency of Canadian dollars to the Company’s reporting currency of US dollars are unrealized gains and losses, the differences are recorded in other comprehensive income (loss), and do not impact the calculation of Loss/Earnings per Share. |
Income Tax, Policy [Policy Text Block] | Deferred income taxes |
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Income taxes are accounted for using the asset and liability method of accounting. Deferred income taxes are recognized for the future income tax consequences attributable to differences between the carrying values of assets and liabilities and their respective income tax bases and for loss carry-forwards. Deferred income tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the periods in which temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change in tax laws or rates is included in earnings in the period that includes the enactment date. When realization of deferred income tax assets does not meet the more-likely-than-not criterion for recognition, a valuation allowance is provided. |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Stock-based compensation |
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The Company grants stock options to employees and directors pursuant to a share incentive plan described in note 5. Compensation expense is recorded for issued stock options using the fair value method with a corresponding increase in additional paid-in capital. Any consideration received on the exercise of stock options is credited to share capital. |
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The fair value of stock options is measured at the grant date and amortized on a straight-line basis over the vesting period. |
Warrants [Policy Text Block] | Warrants |
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The Company accounts for the warrants under the authoritative guidance on accounting for derivative financial instruments indexed to, and potentially settled in, a company’s own stock, on the understanding that in compliance with applicable securities laws, the registered warrants require the issuance of registered securities upon exercise and do not sufficiently preclude an implied right to net cash settlement. The Company classifies warrants in its consolidated balance sheet as a liability which is revalued at each balance sheet date subsequent to the initial issuance. The Company uses the Black-Scholes pricing model to value the warrants. Determining the appropriate fair-value model and calculating the fair value of registered warrants requires considerable judgment. A small change in the estimates used may cause a relatively large change in the estimated valuation. The estimated volatility of the Company’s common stock at the date of issuance, and at each subsequent reporting period, is based on historic fluctuations in the Company’s stock price. The risk-free interest rate is based on the Government of Canada rate for bonds with a maturity similar to the expected remaining life of the warrants at the valuation date. The expected life of the warrants is based on the historical pattern of exercises of warrants. |
Segment Reporting, Policy [Policy Text Block] | Segment information |
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The Company operates in a single reporting segment. Substantially all of the Company’s revenues to date were earned from customers or collaborators based in the United States. Substantially all of the Company’s premises, property and equipment are located in Canada. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent accounting pronouncements |
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From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB) or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, we believe that the impact of recently issued standards that are not yet effective will not have a material impact on our financial position or results of operations upon adoption. |
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In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (ASC 606). The standard is intended to clarify the principles for recognizing revenue and to develop a common revenue standard for U.S. GAAP and IFRS by creating a new Topic 606, Revenue from Contracts with Customers. This guidance supersedes the revenue recognition requirements in ASC 605, Revenue Recognition, and supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition – Construction-Type and Production-Type Contracts. The core principle of the accounting standard is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those good or services. The amendments should be applied by either (1) retrospectively to each prior reporting period presented; or (2) retrospectively with the cumulative effect of initially applying this ASU recognized at the date of initial application. The update is effective for annual periods and interim periods within those annual periods, beginning after December 15, 2016, which for the Company means January 1, 2017. Early application is not permitted. The extent of the impact of adoption has not yet been determined. |
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In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The update is intended to provide guidance in GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. Under amendments to GAAP, the assessment period is within one year after the date that the financial statements are issued (or available to be issued). The amendments are effective for the annual period ending after December 15, 2016, which for the Company means January 1, 2017, and for annual periods and interim periods thereafter. Early application is permitted. The Company does not plan to early adopt this update. The extent on the impact of this adoption has not yet been determined. |