| SIGNIFICANT ACCOUNTING POLICIES | NOTE 2:-
SIGNIFICANT ACCOUNTING POLICIES The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP").
a.
Use of estimates: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. The Company's management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they were made.
b.
Financial statements in U.S. dollars: The Company's revenues are generated in U.S. dollars (USD), Australian dollars, Canadian dollars, Euros and New Israeli Shekels (NIS). In addition, most of the Company's costs are incurred in USD, NIS, Euros, Australian dollars, Canadian dollars and Singapore dollars. The Company's management believes that the USD is the primary currency of the economic environment in which the Company operates. Thus, the functional and reporting currency of the Company is the USD.
The functional currency of the majority of the Company's foreign subsidiaries is the local currency in which it operates. Accordingly, monetary accounts maintained in currencies other than the are re-measured into dollars in accordance with Accounting Standards Codification ("ASC") 830, "Foreign Currency Matters". All transaction gains and losses resulting from the re-measurement of monetary balance sheet items denominated in non-USD currencies are reflected in the statements of operations as financial income or expenses as appropriate. The financial statements of the Company's subsidiaries of which the functional currency is not the USD have been translated into dollars. All amounts on the balance sheets have been translated into the USD using the exchange rates in effect on the relevant balance sheet dates. All amounts in the statements of operations have been translated into the USD using the exchange rate on the respective dates on which those elements are recognized. The resulting translation adjustments are reported as a component of accumulated other comprehensive income in shareholders' equity.
c.
Principles of consolidation: The consolidated financial statements include the accounts of the Company and its wholly and majority-owned subsidiaries. Inter-company transactions and balances, including profit from inter-company sales not yet realized outside of the Company, have been eliminated upon consolidation.
d.
Cash equivalents: Cash equivalents are short-term highly liquid investments that are readily convertible to cash with original maturities of three months or less at the date acquired.
e.
Short-term bank deposits:
Short-term bank deposits are deposits with original maturities of more than three months but less than one year. Short-term bank deposits are presented at their cost, which approximates their fair value.
f.
Derivatives: ASC 815, Derivative and Hedging, requires companies to recognize all of their derivative instruments as either assets or liabilities in the statement of financial position at fair value. For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge or a hedge of a net investment in a foreign operation. Derivative instruments designated as hedging instruments For derivative instruments that are designated and qualify as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same period during which the hedged transaction affects earnings. The remaining gain or loss on the derivative instrument in excess of the cumulative change in the present value of future cash flows of the hedged item, if any, is recognized in current earnings during the period of change. For derivative instruments not designated as hedging instruments, the gain or loss is recognized in current earnings during the period of change. To hedge against the risk of overall changes in cash flows resulting from foreign currency salary payments during the periods, the Company has instituted a foreign currency cash flow hedging program. The Company hedges portions of its forecasted salary expenses denominated in NIS. These forward contracts are designated as cash flow hedges, as defined by ASC 815, and are all effective, as their critical terms match the underlying transactions being hedged. As of December 31, 2015 and 2014, the unrealized gain (loss) recorded in accumulated other comprehensive income from the Company's currency forward NIS transactions were $ 20 ($1,334) At December 31, 2015 and 2014, the notional amounts of foreign exchange forward contracts which the Company entered into were $ 749 12,925 respectively Derivative instruments not designated as hedging instruments In addition to the derivatives that are designated as hedges as discussed above, the Company enters into certain foreign exchange forward and options contracts to limit its exposure to foreign currencies. Gains and losses related to such derivative instruments are recorded in financial expenses, net. At December 31, 2015 and 2014, the notional amount of foreign exchange forward and option contracts into which the Company entered was $ 186,217 86,639 The following tables present fair value amounts of, and gains and losses recorded in relation to, the Company's derivative instruments and related hedged items:
Balance Sheet
Fair Value of Derivative Instruments
Year ended December 31,
2015 2014
Derivative Assets:
Derivatives not designated as hedging instruments:
Foreign exchange option and forward contracts
Other accounts receivable and prepaid expenses $ 2,040 $ 2,479
Derivatives designated as hedging instruments:
Foreign exchange forward contracts Other accounts receivable and prepaid expenses $ 20 $ -
Total $ 2,060 $ 2,479
Derivative Liabilities
Derivatives not designated as hedging instruments:
Foreign exchange option and forward contracts
Other accounts payable and accrued expenses $ (1,421 ) (1,453 )
Derivatives designated as hedging instruments:
Foreign exchange forward contracts
Other accounts payable and accrued expenses $ - $ (1,447 )
Total $ (1,421 ) $ (2,900 )
Gain (loss) Recognized in Other Comprehensive Income, net
Gain (loss) Recognized in Statements of Operations
Year ended December 31,
Statements of
Year ended December 31,
2015
2014
Item
2015
2014
Derivatives designated as hedging instruments
Foreign exchange forward contract $ 20 $ (1,334 )
Operating expenses $ (1,364 ) $ (834 )
Derivatives not designated as hedging instruments:
Foreign exchange forward and options contracts - -
Financial expenses, net 3,242 (153 )
Total $ 20 $ (1,334 ) $ 1,878 $ (987 )
g.
Inventories: Inventories are stated at the lower of cost or market value. The Company periodically evaluates the quantities on hand relative to historical and projected sales volumes, current and historical selling prices and contractual obligations to maintain certain levels of parts. Based on these evaluations, inventory write-offs are provided to cover risks arising from slow-moving items, discontinued products, excess inventories, market prices lower than cost and adjusted revenue forecasts. Cost is determined as follows: Raw Materials - Cost is determined on a standard cost basis which approximates actual costs on a weighted average basis. Work-in-progress and finished products - are based on standard cost (which approximates actual cost on a weighted average basis) which includes raw materials cost, labor and manufacturing overhead. Finished goods are stated at the lower of cost or market. The following table provides the details of the change in the Company's provision for inventory:
December 31,
2015 2014
Inventory provision, beginning of year $ 7,724 $ 6,268
Increase in inventory provision 1,708 1,707
Write off (447 ) (251 )
Inventory provision, end of year $ 8,985 $ 7,724
h.
Property, plant and equipment, net:
1.
Property, plant and equipment are stated at cost, net of accumulated depreciation and investment grants.
2.
Costs recorded prior to a production line completion are reflected as construction in progress, which are recorded to land, building and machinery assets at the date of purchase. Construction in progress includes direct expenditures for the construction of the production line and is stated at cost. Capitalized costs include costs incurred under the construction contract: advisory, consulting and direct internal costs (including labor) and operating costs incurred during the construction and installation phase.
3.
Depreciation is calculated by the straight-line method over the estimated useful life of the assets at the following annual rates:
%
Machinery and manufacturing equipment
4 33
Office equipment and furniture
7 33
Motor vehicles
10 30
Buildings
4 5
Leasehold improvments
Over the shorter of the term of the lease or the life of the asset The Company has accounted for its assets that are under a capital lease arrangement in accordance with Accounting Standard Codification 840 "Leases" ("ASC 840"). Accordingly, assets under a capital lease are stated as assets of the Company on the basis of ordinary purchase prices (without the financing component), and depreciated according to the shorter of the lease term and the usual depreciation rates applicable to such assets. Lease payments payable in forthcoming years, net of the interest component included in them, are included in liabilities. The interest in respect of such amounts is accrued on a current basis and is charged to earnings.
i.
Impairment of long-lived assets: The Company's long-lived assets, tangible and finite-lived intangible assets (other than goodwill), are reviewed for impairment in accordance with Accounting Standard Codification 360 "Property, Plant and Equipment" ("ASC 360") whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. No impairment losses were identified during any period presented.
j.
Goodwill and other intangibles assets: Goodwill represents the excess of the cost of businesses acquired over the fair value of the net assets acquired in the acquisition. Under Accounting Standard Codification 350, "Intangibles-Goodwill and Other" ("ASC 350") goodwill is not amortized but instead is tested for impairment at least annually (or more frequently if impairment indicators arise). In the evaluation of goodwill for impairment, the Company has the option to perform a qualitative assessment to determine whether further impairment testing is necessary or to perform a quantitative assessment by comparing the fair value of a reporting unit to its carrying amount, including goodwill. Under the qualitative assessment, an entity is not required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount. If under the quantitative assessment the fair value of a reporting unit is less than its carrying amount, then the amount of the impairment loss, if any, must be measured under step two of the impairment analysis. In the first phase of impairment testing, goodwill attributable to the reporting units is tested for impairment by comparing the fair value of each reporting unit with its carrying value. If the carrying value of the reporting unit exceeds its fair value, the second phase is then performed.
The Company performs an annual goodwill impairment test during the fourth quarter of each fiscal year, or more frequently, if impairment indicators are present. The Company Goodwill was tested for impairment by comparing its fair value with its carrying value. As required by ASC 820, "Fair Value Measurements", the Company applies assumptions that market place participants would consider in determining the fair value of reporting unit. No impairment of goodwill was identified during any period presented. Acquired intangible assets other than goodwill are amortized over their weighted average amortization period unless they are determined to be indefinite. Acquired intangible assets are carried at cost, less accumulated amortization. For intangible assets purchased in a business combination, the estimated fair values of the assets received are used to establish the carrying value. The fair value of acquired intangible assets is determined using common techniques, and the Company employs assumptions developed using the perspective of a market participant.
k.
Warranty : The Company generally provides a standard warranty of between three ten The following table provides the details of the change in the Company's warranty accrual:
2015 2014
January 1, $ 2,620 $ 2,624
Charged to costs and expenses relating to new sales 1,091 1,154
Costs of product warranty claims (1,195 ) (989 )
Foreign currency translation adjustments (343 ) (169 )
December 31, $ 2,173 $ 2,620
l.
Revenue recognition: The Company derives its revenues from sales of quartz surfaces mostly through a combination of direct sales in certain markets and indirectly through a network of distributors in other markets. Revenues are recognized in accordance with ASC 605, "Revenue Recognition" when delivery has occurred, persuasive evidence of an agreement exists, the fee is fixed and determinable, collectability is probable and no further obligations exist. All of the Company's products that are sold through agreements with exclusive distributors are non-exchangeable, non-refundable, non-returnable and without any rights of price protection or stock rotation. Accordingly, the Company considers all the distributors to be end-consumers.
m.
Research and development costs: Research and development costs are charged to the statement of income as incurred.
n.
Income taxes: The Company and its subsidiaries account for income taxes in accordance with ASC 740, "Income Taxes". This statement prescribes the use of the liability method whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax liabilities and assets are classified as current or noncurrent based on the classification of the related asset or liability for financial reporting purposes, or according to the expected reversal dates of the specific temporary differences if not related to an asset or liability for financial reporting. The Company accounts for its uncertain tax positions in accordance with ASC 740-10. ASC 740-10 contains a two-step approach to recognizing and measuring uncertain tax positions accounted for in accordance with ASC 740. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. The Company accrues interest and penalties related to unrecognized tax benefits in its tax expenses.
o.
Advertising expenses: Advertising costs are expensed as incurred. Advertising expenses for the years ended December 31, 2015, 2014 and 2013 were $ 22,380 18,557 16,589
p.
Concentrations of credit risk: Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, short-term bank deposits and trade receivables. The Company's cash and cash equivalents are invested primarily in U.S. dollars, mainly with major banks in Israel. The Company's trade receivables are derived from sales to customers located mainly in the United States, Australia, Canada, Europe and Israel. The Company performs ongoing credit evaluations of its customers and to date has not experienced any substantial losses. In certain circumstances, the Company requires letters of credit or prepayments. An allowance for doubtful accounts is provided with respect to specific receivables that the Company has determined to be doubtful of collection. For those receivables not specifically reviewed, provisions are recorded at a specific rate, based upon the age of the receivable, the collection history, current economic trends and management estimates. December 31, 2015, 2014 and 2013 The following table provides the detail of the change in the Company's provision for doubtful debts:
2015 2014
January 1, $ 2,225 $ 1,898
Charges to expenses (340 ) 974
Write offs (524 ) (544 )
Foreign currency translation adjustments (140 ) (103 )
December 31, $ 1,221 $ 2,225
q.
Severance pay: The Company's liability for severance pay, with respect to its Israeli employees, is calculated pursuant to Israeli severance pay law and employee agreements based on the most recent salary of the employees. The Company's liability for all of its Israeli employees is provided for by monthly deposits with insurance policies and by an accrual. The value of these policies is recorded as an asset on the Company's balance sheet. The deposited funds include profits or losses accumulated up to the balance sheet date. The deposited funds may be withdrawn only upon the fulfillment of the obligations pursuant to Israeli severance pay law or labor agreements. Some agreements with employees specifically state, in accordance with section 14 of the Severance Pay Law, 1963, that the Company's contributions for severance pay shall be instead of severance compensation and that upon release of the policy to the employee, no additional calculations shall be conducted between the parties regarding the matter of severance pay and no additional payments shall be made by the Company to the employee. Further, since the Company has signed agreements with its employees under section 14, the related obligation and amounts deposited on behalf of such obligation are not stated on the balance sheet, as they are legally released from obligation to employees once the deposit amounts have been paid. Severance pay expenses for the years ended December 31, 2015, 2014 and 2013 amounted to approximately $ 499 455 456
r.
Fair value of financial instruments: Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the "exit price") in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various valuation approaches. ASC 820 establishes a 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 that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the inputs as follows:
Level 1-
Quoted prices in active markets for identical assets or liabilities.
Level 2-
Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.
Level 3-
Valuations based on inputs that are unobservable and significant to the overall fair value measurement. Foreign currency derivative contracts are classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments. The following table presents the Company's assets and (liabilities) measured at fair value on a recurring basis at December 31, 2015 and 2014:
December 31, 2015
Level 1
Level 2
Level 3
Total
Derivatives:
Foreign currencies derivative assets $ - $ 2,060 $ - $ 2,060
Foreign currencies derivative liabilities $ - $ (1,421 ) $ - $ (1,421 )
Total $ - $ 639 $ - $ 639
December 31, 2014
Level 1
Level 2
Level 3
Total
Derivatives:
Foreign currencies derivative assets $ - $ 2,479 $ - $ 2,479
Foreign currencies derivative liabilities $ - $ (2,900 ) $ - $ (2,900 )
Total $ - $ (421 ) $ - $ (421 ) The carrying amounts of financial instruments not measured at fair value, including cash and cash equivalents, short-term bank deposits, trade receivables, trade payables and short term loans, approximate their fair value due to the short-term maturities of such instruments. The carrying amount of long-term loans approximates their fair value.
s.
Basic and diluted net income per share: Basic net income per share ("Basic EPS") is computed by dividing net income attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted net income per share ("Diluted EPS") gives effect to all dilutive potential ordinary shares outstanding during the period. The computation of Diluted EPS does not assume conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect on earnings. The dilutive effect of outstanding stock options is computed using the treasury stock method. For the year ended December 31, 2015 there were 786,900 outstanding stock options that were excluded from the computation of Diluted EPS, that would have had an anti dilutive effect if included. For the years ended December 31, 2014 and 2013 no outstanding options were excluded from the computation of Diluted EPS.
t.
Comprehensive income and accumulated other comprehensive income: Comprehensive income consists of two components, net income and other comprehensice income ("OCI"). OCI refers to revenue, expenses, and gains and losses that under U.S.
December 31,
2015 2014
Accumulated losses on derivative instruments $ 20 $ (1,334 )
Accumulated foreign currency translation differences (1,912 ) 800
Total accumulated other comprehensive income, net $ (1,892 ) $ (534 ) The following table summarizes the changes in AOCI, net of taxes for the year ended:
Unrealized
Accumulated
Total
Balance at December 31, 2013 $ - $ 3,680 $ 3,680
Other comprehensive income (loss) before reclassifications (2,168 ) (2,880 ) (5,048 )
Amounts reclassified from AOCI 834 - 834
Net current period OCI (1,334 ) (2,880 ) (4,214 )
Balance at December 31, 2014 $ (1,334 ) $ 800 $ (534 )
Other comprehensive income (loss) before reclassifications (10 ) (2,712 ) (2,722 )
Amounts reclassified from AOCI 1,364 - 1,364
Net current period OCI 1,354 (2,712 ) (1,358 )
Balance at December 31, 2015 $ 20 $ (1,912 ) $ (1,892 ) The following table shows the amounts reclassified from AOCI into the Consolidated Statements of Operations, and the associated financial statement line item, for 2015 and 2014:
Affected line item in the consolidated statement of income
2015
2014
Cost of revenues $ 1,105 $ 692
Research and development 27 17
Marketing and selling 109 67
General and administrative 123 58
$ 1,364 $ 834
u.
Accounting for stock-based compensation:
1.
The Company accounts for stock-based compensation in accordance with ASC 718, "Compensation-Stock Compensation" ("ASC 718"). ASC 718 requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model.
The Company accounts for employees' share-based payment awards classified as equity awards using the grant-date fair value method. The fair value of share-based payment transactions is recognized as an expense over the requisite service period, net of estimated forfeitures. The Company estimates forfeitures based on historical experience and anticipated future conditions. The Company elected to recognize compensation expense for an award that has a graded vesting schedule using the accelerated method. The exercise price of each option is generally the fair market value on the date of the grant. Options generally become exercisable over approximately three four 7 four In 2015, the Company estimated the fair value of stock options granted using the Black-Scholes option pricing model with the following
2015
Dividend yield 0 %
Expected volatility 41.1 %
Risk-free interest rate 1.2 %
Expected life (in years) 3.98 The Company used volatility data of comparable companies with similar characteristics to the Company for calculating volatility in accordance with ASC 718. The computation of historical volatility was derived from the comparable companies' historical volatility for similar contractual terms. The computation of risk free interest rate is based on the rate available on the date of grant of a zero-coupon U.S. government bond with a remaining term equal to the expected term of the option. The expected term of options granted is calculated using the simplified method (being the average between the vesting periods and the contractual life of the options). The Company currently uses the simplified method as adequate historical experience is not available to provide a reasonable estimate. The dividend yield is zero, due to a dividend adjustment mechanism with respect to the exercise price upon payment of a dividend.
2.
Phantom share based payment: During 2014, the Company granted several of its employees a right to a bonus payment based on an increase in the Company's share value (the "phantom award") under which the employees are entitled to receive in cash or shares the difference between exercise price, subject to adjustments for dividend distributions made until the actual payment of the bonus and the value of the Company's ordinary shares with such bonus right vesting over a four According to ASC 718-10, instruments that are required to be cash-settled (e.g., cash-settled stock appreciation rights) or require cash settlement on the occurrence of a contingent event that is considered probable should be treated as a liability. As such, in this case the share-based compensation is accounted for as a liability award. According to ASC 718-10, in connection with the measurement of the liability settlement, the value of the award should be measured each reporting date until settlement. The fair value of the phantom award was calculated using the Binominal option pricing model. On October 27, 2015, the Company's board of directors approved the grant of stock options and RSUs as a partial replacement for the phantom awards previously granted during 2014.
A change in the terms or conditions of the phantom awards is accounted for as a modification under ASC 718. On the date of modification, the amounts previously recorded as a share-based compensation liability are reclassified and recorded as a component of equity by a credit to additional paid-in capital. The Company reclassified $ 195 The Company estimated the fair value of the remaining phantom awards, using the binominal option pricing model with the following weighted average assumptions:
December 31,
2015 2014
Dividend yield 0 % 0 %
Expected volatility 39.2 % 45.0 %
Risk-free interest rate 1.8 % 1.9 %
Expected life (in years) 5.2 6.3 As of December 31, 2015 and 2014, the Phantom liability balance was $ 538 1,555 52
v.
Redeemable non-controlling interest: The Company is party to a put and call arrangement with respect to the remaining 45
The following table provides a reconciliation of the redeemable non-controlling interest:
December 31,
2015
2014
2013
Beginning of the year $ 8,715 $ 7,624 $ 7,106
Net income attributable to non-controlling interest 1,692 1,820 1,009
Foreign currency translation adjustments (1,566 ) (729 ) (491 )
Redeemable non-controlling interest - end of the year $ 8,841 $ 8,715 $ 7,624
w.
Capitalized software costs:
The Company follows the accounting guidance specified in ASC 350-40, Internal-Use Software. The Company capitalizes costs incurred in the acquisition or development of software for internal use, including the costs of the software, materials, and consultants incurred in developing internal-use computer software, once final selection of the software is made. Costs incurred prior to the final selection of software and costs not qualifying for capitalization are charged to expense. Capitalized software costs are amortized on a straight-line basis over it's useful life.
x.
Contingencies:
The Company is involved in various product liability, commercial, government investigations, environmental claims and other legal proceedings that arise from time to time in the course of business. The Company records accruals for these types of contingencies to the extent that the Company concludes their occurrence is probable and that the related liabilities are estimable. When accruing these costs, the Company will recognize an accrual in the amount within a range of loss that is the best estimate within the range. When no amount within the range is a better estimate than any other amount, the Company accrues for the minimum amount within the range. The Company records anticipated recoveries under existing insurance contracts that are probable of occurring at the amount that is expected to be collected. Legal costs are expensed as incurred.
y.
Impact of recently issued accounting standards
1.
In May 2014, the FASB issued ASU No. 2014-09 related to revenue recognition. This new standard will replace all current GAAP guidance on this topic and eliminate all industry-specific guidance. The new revenue recognition guidance provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. This guidance can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. In 2015, the FASB issued guidance to defer the effective date to fiscal years beginning after December 15, 2017 with early adoption for fiscal years beginning December 15, 2016. The Company is evaluating the impact of adopting this new accounting guidance on its consolidated financial statements.
2.
In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330), Simplifying the Measurement of Inventory. Under this ASU, the measurement principle for inventory will change from lower of cost or market value to lower of cost and net realizable value. The ASU defines net realizable value as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The ASU is applicable to inventory that is accounted for under the first-in, first-out method and is effective for reporting periods after December 15, 2016, with early adoption permitted. The Company is evaluating the impact of adopting this new accounting guidance on its consolidated financial statements.
3.
In November 2015, the FASB issued ASU No. 2015-17
4.
In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) that will supersede current guidance related to accounting for leases. The guidance is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The standard will be effective for the first interim period within annual periods beginning after December 15, 2018, with early adoption permitted. The standard is required to be adopted using the modified retrospective approach. The |
