Significant Accounting Policies (Policies) | 12 Months Ended |
Jun. 30, 2014 |
Significant Accounting Policies [Abstract] | ' |
Basis of Presentation and Use of Estimates | ' |
Basis of Presentation and Use of Estimates |
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The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Certain previously reported amounts have been reclassified to conform to the current year financial statement presentation. |
Principles of Consolidation | ' |
Principles of Consolidation |
The accompanying consolidated financial statements include the accounts of the Company, its majority-owned subsidiaries and all variable interest entities ("VIEs") for which the Company is the primary beneficiary. All significant intercompany transactions are eliminated in consolidation. Investments in which the Company does not have a controlling interest or is not the primary beneficiary, but over which the Company is able to exercise significant influence, are accounted for under the equity method. Under the equity method, the original cost of the investment is adjusted for the Company’s share of post-acquisition earnings or losses less distributions received. |
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The Fortress contribution of Intrawest U.S. and Intrawest Canada to the Company is treated as a reorganization of entities under common control. As required by GAAP for common control transactions, all assets and liabilities transferred to the Company as part of the Restructuring were recorded in the financial statements at carryover basis. The European operations held by a wholly-owned subsidiary of the Partnership were not contributed to the Company in connection with the Restructuring. |
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In January 2013, the Canadian helicopter business was reorganized and Alpine Helicopters Inc. (“Alpine Helicopters”) was formed in which the Company owns a 20% equity interest. Alpine Helicopters employs all the pilots that fly the helicopters in the CMH land tenures. Alpine Helicopters leases 100% of its helicopters from Intrawest Canada, a consolidated subsidiary, creating economic dependence and therefore giving Intrawest Canada a variable interest in Alpine Helicopters. Alpine Helicopters is a VIE for which the Company is the primary beneficiary and is consolidated in these financial statements. The remaining 80% equity interest is held by the employees of Alpine Helicopters and is reflected as a noncontrolling interest on the consolidated financial statements. As of June 30, 2014, Alpine Helicopters had total assets of $8.4 million and total liabilities of $6.0 million. |
Cash and Cash Equivalents | ' |
Cash and Cash Equivalents |
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Cash and cash equivalents are held in highly liquid investments, primarily demand deposit accounts with highly rated U.S. and Canadian financial institutions, with original terms to maturity of three months or less. |
Restricted Cash | ' |
Restricted Cash |
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Restricted cash is comprised primarily of deposits to settle future claims related to self-insurance. Additionally, restricted cash includes guest lodging deposits in jurisdictions that require down payments or deposits to be retained in a trust account, and deposits to secure certain letters of credit. |
Receivables | ' |
Receivables |
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Trade receivables are recorded in the normal course of business related to the sale of products or services and presented net of an allowance for doubtful accounts. In the determination of the allowance, the Company considers specific accounts, accounts receivable aging reports, customer past repayment history, the economic environment, and other factors that could affect collectability. Write-offs are evaluated on a case by case basis. |
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Interest income on notes receivables is recognized on an accrual basis when earned. Any deferred portion of contractual interest is recognized on methods that approximate the effective interest method over the term of the corresponding note. Interest income was $4.7 million, $6.6 million and $7.5 million for the years ended June 30, 2014, 2013, and 2012, respectively. |
Inventories | ' |
Inventories |
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Inventories consisting of retail goods, food and beverage products are recorded at the lower of cost or net realizable value, determined using the weighted-average cost method. The Company records an allowance for estimated shrinkage and obsolete or unusable inventory. |
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Vacation points inventories are stated at the lower of cost or market value less cost to sell. Inventory costs are allocated to cost of point sales using a method that approximates the relative sales value method. The Company periodically reviews the carrying value of the inventory for impairment. |
Property, Plant and Equipment | ' |
Property, Plant and Equipment |
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Property, plant and equipment is recorded at cost less accumulated depreciation less any impairment loss. Repairs and maintenance are expensed as incurred. Expenditures that improve the service capacity or extend the useful life of an asset are capitalized. When property, plant and equipment is retired or otherwise disposed of, the related gain or loss is included in operating income (loss). Depreciation is calculated using the straight-line method over the estimated useful lives of each asset category, which are as follows: |
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Asset Category | | Estimated Life in Years | |
Buildings and building improvements | | | May-40 | |
Ski lifts and area improvements | | | 30-May | |
Automotive, helicopters and other equipment | | | 20-Feb | |
Golf course improvements | | | 20 | |
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Certain buildings, area improvements and equipment are located on leased or licensed land and are amortized over the lesser of the lease or license term or its estimated useful life. |
Real Estate Held for Development | ' |
Real Estate Held for Development |
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The Company has not been involved in new development activities during the years ended June 30, 2014, 2013, and 2012. Real estate held for development is recorded at the lower of cost or net realizable value. Land and infrastructure development costs include all expenditures incurred in connection with the acquisition, development and construction of real estate. These expenditures consist of all direct costs, interest on specific debt, interest on total costs financed by the Company's pooled debt and property taxes during the development period. The Company expenses costs directly related to the acquisition of new real estate properties and resort businesses. Costs incurred in connection with operating properties classified as real estate held for development, including indirect and general and administrative overhead costs, are recorded to cost of sales when incurred. Sales commission expenses are recorded in the same period that the related revenue is recorded. |
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Real estate held for development is reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of a particular real estate property exceeds the estimated net realizable value. During the years ended June 30, 2014, 2013, and 2012, the Company experienced deteriorated real estate conditions which indicated real estate held for development could have carrying values higher than their net realizable value. Consequently, the Company obtained third party valuations and recorded impairment charges of $0.6 million, $1.1 million, and $8.1 million in the years ended June 30, 2014, 2013, and 2012, respectively. Impairments related to legacy and non-core operations for the years ended June 30, 2014, 2013, and 2012 were $0.6 million, $1.0 million, and $8.1 million, respectively. Impairments related to the Real Estate segment for the years ended June 30, 2014, 2013, and 2012 were zero, $0.1 million, and zero, respectively. |
Deferred Charges and Other | ' |
Deferred Charges and Other |
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Deferred charges and other is comprised primarily of deferred financing costs. Deferred financing costs consist of capitalized legal and other fees directly related to the issuance of debt securities, net of accumulated amortization. These costs are amortized by methods that approximate the effective interest method over the respective term of the applicable debt instrument and recorded to interest expense. |
Goodwill and Intangible Assets | ' |
Goodwill and Intangible Assets |
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Goodwill represents the excess of purchase price over the fair value of net assets acquired in a business combination. Goodwill is not amortized, but is tested for impairment annually as of June 30th and at any time when events or circumstances suggest impairment may have occurred. The Company has reporting units with allocated goodwill in both the Mountain and Real Estate segments. |
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The testing for impairment consists of a comparison of the fair value of the reporting unit with its carrying amount. If the carrying amount of the reporting unit, including goodwill, exceeds the fair value, an impairment will be recognized equal to the difference between the carrying value of the reporting unit goodwill and the implied fair value of the goodwill. For the testing of goodwill for impairment, the Company determines the estimated fair value of its reporting units based upon a discounted future cash flow analysis. |
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The Company's major definite-lived intangible asset categories and estimated useful lives are as follows: |
Intangible Asset Category | | Estimated Life in Years | |
Permits and licenses | | | 20-45 | |
Trademarks and trade names | | | 20-Oct | |
Customer relationships | | | 8 | |
Other | | | 20-Aug | |
Long-lived Assets | ' |
Long-lived Assets |
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The Company evaluates potential impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. An impairment will be recognized as the amount by which the carrying amount of a long-lived asset exceeds its fair value. |
Deferred Revenue and Deposits | ' |
Deferred Revenue and Deposits |
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Deferred revenue and deposits are comprised primarily of season pass revenue, lodging and tour deposits, deposits on real estate sales and mountain club initiation deposits. Deferred revenue relating to the sale of season passes is recognized throughout the season based on the estimated number of skier visits based on historical data. Lodging and tour deposits deferred revenue is recognized when the related service is provided. Deferred revenue relating to real estate deposits is recognized upon closing of the sale. Deferred revenue relating to mountain club initiation deposits is recognized on a straight-line basis over the estimated membership terms. |
Self-Insured Liabilities | ' |
Self-Insured Liabilities |
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The Company has a policy of self-insuring when the expected losses from self-insurance are low relative to the cost of purchasing third-party insurance at various deductible levels. The self-insurance program includes workers’ compensation benefits in the United States and medical, property, automobile and general liability coverage in the United States and Canada. An accrual for self-insured liabilities is recorded based on management’s best estimate of the ultimate cost to settle claims considering historical claims experience, claims filed and the advice of actuaries and plan administrators. |
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Liabilities for insurance-related assessments are not discounted and are included as part of accrued liabilities and other long-term liabilities on the consolidated balance sheets. As of June 30, 2014 and 2013, the liability balances were $7.5 million and $8.3 million, respectively. |
Revenue Recognition | ' |
Revenue Recognition |
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The Company earns revenue from a variety of sources. Revenue is recognized when the following criteria have been met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the fee is fixed or determinable and the collection of funds is reasonably assured. The following describes revenue recognition for the Company's three segments: |
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(i) | Mountain segment revenue is derived from a wide variety of sources, including sales of lift tickets (including season passes), ski school operations, dining operations, retail sales, equipment rentals, lodging operations and food and beverage operations. Persuasive evidence is obtained and collection of funds assured through cash transactions or credit card validation at the point of sale. Revenue is recognized as goods are delivered or services are performed. Season pass revenue, although primarily collected prior to the ski season, is recognized in our consolidated financial statements during the ski season based on the estimated average number of visits by season pass holders in each month during the ski season, which is based on historical three year average visitation by season pass holders at our resorts. Frequency product revenue is recognized as used, and unused portions are recognized based on the prior three year average usage for each frequency product. | | | |
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(ii) | Adventure segment revenue is derived from a variety of sources, including all-inclusive packages for stays and tours for heli-skiing, mountaineering and hiking at Company owned and leased resorts, as well as ancillary revenue from helicopter maintenance and repair services, leasing, and off-season fire suppression services. Revenue is recognized as goods are delivered or services are performed. For CMH adventure vacation packages, payments in advance are recognized as revenue as goods are delivered or services are performed. | | | |
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(iii) | The Real Estate segment earns revenue from IRCG, IHM and Playground. During the fiscal years presented, there were no active development projects or development revenue. IRCG generates revenue from the sale of vacation points, management of Club Intrawest properties, an unaffiliated, not-for-profit entity, management of a private exchange company, and income on the receivables portfolio. Vacation points revenue associated with membership in the vacation ownership business of IRCG is recognized when the purchaser has paid the amount due on closing, all contract documentation has been executed and all other significant conditions of sale are met. The Company follows real estate time-sharing accounting principles, which set out specific guidelines for assessing whether the buyer’s initial and continuing investments are adequate to demonstrate a commitment to pay for the property. Such a demonstration is required for the seller of a time-sharing arrangement to recognize profit by the full accrual method. Sales are recorded upon closing when profitability can be determined and collectability can be reasonably assured. Buyers can finance a portion of the sales price through nonrecourse loans. IHM generates revenue from managing rental operations at the Honua Kai Resort and Spa in Maui, Hawaii and the Westin Monache Resort in Mammoth Lakes, California. Playground earns revenue from the commissions on the sales of real estate. The Company also manages commercial real estate for owned properties and third parties. | | | |
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Commission revenue from brokerage operations for the Company owned real estate is included in Real Estate revenue and is recognized at the time an offer of sale is closed by the purchaser or all other contractual obligations have been satisfied. Commission revenue for third-party projects from real estate brokerage operations is included in Real Estate revenue and is recognized when the deals listing agreement is executed. |
Advertising Costs | ' |
Advertising Costs |
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The Company expenses advertising costs at the time such advertising commences. Advertising costs are classified in operating expenses on the consolidated statements of operations and were $16.8 million, $14.4 million and $12.7 million for the years ended June 30, 2014, 2013, and 2012, respectively. |
Income Taxes | ' |
Income Taxes |
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Deferred tax assets and liabilities are recorded for the estimated future tax effects of temporary differences between tax bases of assets and liabilities and book basis reported in the consolidated balance sheets and for operating loss and tax credit carryforwards. The change in deferred tax assets and liabilities for the period measures the deferred tax provision or benefit for the period. Effects of changes in enacted tax laws on deferred tax assets and liabilities are reflected as adjustments to the tax provision or benefit in the period of enactment. To the extent that it is considered to be more likely than not that some or all of the deferred tax assets will not be realized, a valuation allowance is provided. |
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The Company recognizes accrued interest related to uncertain tax positions as a component of income tax expense. Penalties, if incurred, are recorded in operating expenses in the consolidated statements of operations. |
Foreign Currency | ' |
Foreign Currency |
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The consolidated financial statements are presented in United States dollars (“USD”). The Company’s Canadian subsidiaries generally have the Canadian dollar (“CAD”) as their functional currency. |
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The accounts of entities where the USD is not the functional currency are translated into USD using the exchange rate in effect at the balance sheet date for asset and liability amounts and at the monthly average rate in effect for the period for amounts included in the determination of income. Cumulative unrealized gains or losses arising from the translation of the financial position of these subsidiaries into USD are included in total equity as a component of accumulated other comprehensive income (loss) ("AOCI"). |
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Exchange gains or losses arising from transactions that are denominated in foreign currencies into the applicable functional currency are included in the determination of income and are classified in other income (expense), net in the consolidated statement of operations. |
Share-Based Compensation | ' |
Share-Based Compensation |
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On January 30, 2014, the Company’s Compensation Committee of the Board of Directors approved the terms of the 2014 Omnibus Incentive Plan (the “Plan”), which allows the Company to grant share-based compensation awards in a variety of forms such as options, stock appreciation rights, restricted stock, restricted stock units, stock bonuses, other stock-based awards and cash awards as part of the Company’s long-term incentive compensation plan. |
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Awards granted under the Plan generally vest based on a service condition as defined in each award. Unless otherwise determined or evidenced in an award agreement, in the event that (i) a change in control occurs, as defined in the Plan, and (ii) a participant’s employment or service is terminated without cause within 12 months following the change in control, then (a) any unvested or unexercisable portion of any award carrying a right to exercise shall become fully vested and exercisable, and (b) the restrictions, deferral limitations, payment conditions and forfeiture conditions applicable to any award will lapse and such unvested awards will be deemed fully vested and any performance conditions imposed with respect to such awards will be deemed to be fully achieved. |
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Compensation expense is measured based on the fair value of the award on the date of grant, net of estimated forfeitures, and is recognized as expense on a straight-line basis over the requisite service period. |
Employee Benefit Plans | ' |
Employee Benefit Plans |
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Substantially all of the Company’s employees are covered by Company-sponsored 401(k) plans in the U.S. and defined contribution plans in Canada. The Company’s contributions to these plans are based on a percentage of employee compensation. These plans are funded on a current basis. |
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In addition, certain current and former employees are covered by noncontributory defined benefit pension plans. These plans are funded in conformity with the funding requirements of applicable government regulations. Generally, benefits are based on age, years of service and level of compensation during the final years of employment. The Company accounts for these defined benefit plans by accruing its obligations under the employee benefit plans and the related costs as the underlying services are provided. The Company has frozen the plans and no further service benefits are being earned by plan participants in the defined plans. |
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The funded status of defined benefit plans is recognized entirely on the consolidated balance sheets. The amount recognized as an asset or liability for pension and other postretirement benefit plans is measured as the difference between the benefit obligation and the fair value of plan assets. Overfunded plans are aggregated and recognized as an asset while underfunded plans are aggregated and recognized as a liability. Actuarial gains or losses and prior service costs or credits that arise during the period but are not recognized as components of net pension expense are recognized in accumulated other comprehensive income (loss) net of income tax effects. Actuarial gains and losses are comprised of changes in the amount of either the projected benefit obligation (for pension plans), the accumulated benefit obligation (for other postretirement plans) or differences between actual and expected return on plan assets and from changes in assumptions. The Company measures its pension assets and liabilities as of June 30th of each year. |
Fair Value of Financial Instruments | ' |
Fair Value of Financial Instruments |
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Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. A three-tier fair value hierarchy, which is described below, prioritizes the inputs used in measuring fair value: |
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• | Level 1 – Quoted prices for identical instruments in active markets. | | | |
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• | Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations, in which all significant inputs are observable in active markets. | | | |
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• | Level 3 – Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. | | | |
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The Company has various financial instruments, including cash and cash equivalents, receivables, payables, accrued liabilities and debt obligations. Due to their short-term nature, or, in the case of note receivables, their market comparable interest rates, the instruments’ book value approximates their fair value. |
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The fair value of the FY14 Lien Loan was estimated using quoted prices for our instruments in markets that are not active and was considered a Level 2 measure. The fair value of the FY13 Lien Loans was estimated based on Level 3 inputs using discounted future contractual cash flows and a market interest rate based on published corporate borrowing rates for debt instruments with similar terms and average maturities, with adjustments for credit risk. The fair value of other obligations was estimated based on Level 3 inputs using discounted cash flow analyses based on assumptions that management believed were consistent with market participant assumptions. |
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The Company’s long-term debt obligations are not measured and carried at fair value on a recurring basis. The Company’s debt is initially recorded based upon historical cost. The fair value of debt does not represent the amounts that will ultimately be paid upon the maturities of the loans. |
Derivative Financial Instruments | ' |
Derivative Financial Instruments |
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The Company engages in activities that expose it to market risks including the effects of changes in interest rates and exchange rates. Financial exposures are managed as an integral part of the Company’s risk management activities, which seek to reduce the potentially adverse effect that the volatility of interest rates or exchange rates may have on operating results. |
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As of June 30, 2014 and 2013, the Company had no significant outstanding derivative instruments. Prior to October 2008, the Company had outstanding interest rate swaps that were accounted for as cash flow hedges. The outstanding swap contracts were terminated on October 11, 2008, and the deferred loss previously recorded in AOCI is being recognized in earnings during the period that the hedge covered, which ends on March 31, 2017. Approximately $1.8 million of deferred losses related to the terminated interest rate swaps will be amortized from AOCI into interest expense in the next 12 months. |
Concentration of Credit Risk | ' |
Concentration of Credit Risk |
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The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents and restricted cash. The Company places its cash and temporary cash investments in high quality credit institutions, but these investments may be in excess of regulatory insurance limits. The Company does not enter into financial instruments for trading or speculative purposes. Concentration of credit risk with respect to trade and notes receivables is limited due to the large number of customers and small transactions associated with the Company’s consumer and retail operations and the wide variety of customers and markets in which the Company transacts business. No customer represented 10% or more of total revenue or receivables during the years ended June 30, 2014, 2013, and 2012. Where the Company provides financing, the Company performs ongoing credit evaluations of its customers and generally does not require collateral, but does require advance deposits on certain transactions. |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements |
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In July 2012, the Financial Accounting Standards Board (“FASB”) issued ASU 2012-02, Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment. This update amends ASU 2011-08, Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment and permits an entity first to assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test in accordance with Subtopic 350-30, Intangibles - Goodwill and Other - General Intangibles Other than Goodwill. The Company adopted the provisions of the ASU effective July 1, 2013. The adoption of ASU 2012-02 did not have a material impact on the Company’s financial position, results of operations or cash flows. |
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In February 2013, the FASB issued ASU 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. The ASU does not change the current requirements for reporting net income or other comprehensive income in financial statements. However, the ASU requires an entity to provide information about the amounts reclassified out of AOCI by component. Specifically, the ASU requires the Company to present either in a single note or parenthetically on the face of the financial statements the effect of significant amounts reclassified from each component of AOCI based on its source and the income statement line items affected by the reclassification. If a component is not required to be reclassified to net income in its entirety, the Company would instead cross- reference to the related note for additional information. The guidance included in ASU 2013-02 was effective for the Company beginning July 1, 2013 and was applied prospectively. The adoption of this authoritative guidance did not have an impact on the Company’s financial position, results of operations or cash flows. |
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In April 2014, the FASB issued ASU 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. This update raises the threshold for a disposal to qualify as a discontinued operation and requires new disclosures for discontinued operations as well as certain other disposals that do not meet the definition of a discontinued operation. The guidance is effective for annual periods beginning on or after December 15, 2014 with early adoption permitted only for disposals that have not been previously reported. The Company does not anticipate that the adoption of ASU 2014-08 will have a material impact on the Company's financial position, results of operations or cash flows. |
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On May 28, 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective July 1, 2017. Early adoption is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is currently in the process of evaluating the impact that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. |