| Summary of business operations and significant accounting policies | 1.
Summary of business operations and significant accounting
policies
Throughout this Annual
Report on Form 10-K, unless the context states otherwise, the words
“we,” “us,” “our” and
“Analogic” refer to Analogic Corporation and all of its
subsidiaries taken as a whole, and “our board of
directors” refers to the board of directors of Analogic
Corporation.
Description of
Business
Analogic Corporation
(NASDAQ:ALOG) designs, manufactures, and commercializes innovative
real-time guidance, diagnostic imaging and threat detection
technologies to advance the practice of medicine and save lives. We
operate and report along three business segments: Ultrasound,
Medical Imaging, and Security and Detection. Our Ultrasound segment
provides ultrasound guidance systems for the urology and surgery
markets and is expanding into point of care areas such as
anesthesia and emergency medicine. We sell our ultrasound products
through our direct sales force in North America and Europe, as well
as through a network of distributors to clinical practitioners
throughout the world. Our Medical Imaging segment provides critical
enabling medical imaging systems and subsystems for computed
tomography, or CT, magnetic resonance imaging, or MRI and
high-resolution digital mammography systems. We sell our Medical
Imaging products primarily through longstanding relationships with
well-known multinational medical OEMs and new entrants in emerging
markets. Our Security and Detection segment designs and
manufactures automated threat detection systems for aviation
baggage inspection applications utilizing advanced CT technology.
We sell our security products primarily through multinational OEM
partners.
We were incorporated in
the Commonwealth of Massachusetts in November 1967 and our
headquarters is based in Peabody, Massachusetts.
On March 1, 2013, we
completed the acquisition of Ultrasonix Medical Corporation
(Ultrasonix). On September 20, 2013, we acquired PocketSonics,
Inc. (PocketSonics). On October 28, 2014, we acquired certain
assets and assumed certain liabilities related to the surgical
planning and guidance business of Pathfinder. These acquisitions
are more fully discussed in Note 3. The financial position, results
of operations and cash flows of Ultrasonix, PocketSonics and
Pathfinder are included in our Consolidated Financial Statements
from the date of acquisition.
Significant accounting
policies
(a)
Consolidation
Our consolidated
financial statements include the accounts of us and our
subsidiaries, all of which are wholly owned. Investments in
companies in which ownership interests range from 10 to 50 percent
and for which we exercise significant influence over the
investee’s operating and financial policies, are accounted
for using the equity method. All intercompany accounts and
transactions have been eliminated in
consolidation.
In determining whether we
are the primary beneficiary of an entity and therefore required to
consolidate, we apply a qualitative approach that determines
whether we have both (1) the power to direct the economically
significant activities of the entity and (2) the obligation to
absorb losses of, or the right to receive benefits from, the entity
that could potentially be significant to that entity. We have not
been required to consolidate the activity of any entity due to
these considerations.
(b) Cash and cash
equivalents
We consider all highly
liquid investments with an original maturity of three months or
less at acquisition date to be cash equivalents.
(c) Revenue
recognition and accounts receivable
We recognize revenue
related to product sales upon shipment provided that title and risk
of loss have passed to the customer, there is persuasive evidence
of an arrangement, the sales price is fixed or determinable,
collection of the related receivable is reasonably assured and
customer acceptance criteria, if any, have been successfully
demonstrated. For product sales with acceptance criteria that are
not successfully demonstrated upon shipment, revenue is recognized
upon customer acceptance, provided all other revenue recognition
criteria have been met. Our sales contracts generally provide for
the customer to accept title and risk of loss when the product
leaves our facilities. When shipping terms or local laws do not
allow for passage of title and risk of loss at the shipping point,
we defer recognizing revenue until title and risk of loss transfer
to the customer. We classify shipping and handling invoiced to
customers as revenue and the related costs in cost of sales. Sales
and other taxes collected from customers and subsequently remitted
to government authorities are recorded as accounts receivable with
a corresponding offset recorded to sales taxes payable. These
balances are removed from the consolidated balance sheet when the
cash is remitted to the tax authority. We include service revenue,
related primarily to extended warranty contracts and repairs, in
the product revenue line item of our Consolidated Statement of
Operations, as it is deemed immaterial for separate
classification.
Our transactions
sometimes involve multiple elements (i.e., products and services).
We do not recognize revenue for our product sales under industry
specific software accounting guidance since our products contain
both software and non-software components that function together to
deliver the tangible product’s essential functionality. At
the inception of an agreement, we allocate arrangement
consideration to each deliverable qualifying as a separate unit of
accounting in an arrangement based on its relative selling price.
We determine selling price using vendor specific objective
evidence, or VSOE, if it exists, and otherwise third party
evidence, or TPE. If neither VSOE nor TPE of selling price exists
for a unit of accounting, we use our best estimated selling price,
or BESP. We generally expect that we will not be able to establish
TPE due to the nature of the markets in which we compete, and, as
such, we typically will determine selling price using VSOE or if
not available, BESP.
VSOE is generally limited
to the price charged when the same or similar product or service is
sold separately or, if applicable, the stated substantive renewal
rate in the agreement. If a product or service is seldom sold
separately, it is unlikely that we can determine VSOE for the
product or service. We define VSOE as a median price of recent
standalone transactions that are priced within a narrow range, as
defined by us, or stated renewal rates in
contracts.
TPE is determined based
on the prices charged by competitors of us for a similar
deliverable when sold separately. As noted above, we typically are
not able to use TPE, as we are usually not able to obtain
sufficient information on competitor pricing to substantiate
TPE.
If we are unable to
establish selling price using VSOE or TPE, we use BESP in our
allocation of arrangement consideration. The objective of BESP is
to determine the price at which we would transact if the product or
service were sold by us on a standalone basis.
Our determination of BESP
involves a weighting of several factors based on the specific facts
and circumstances of the arrangement. Specifically, we consider the
cost to produce the deliverable, the anticipated margin on that
deliverable, the selling price and profit margin for similar parts
and our ongoing pricing strategy and policies.
We determine BESP for
deliverables in future agreements based on the specific facts and
circumstances of the arrangement. We analyze the selling prices
used in our allocation of arrangement consideration at least
annually. Selling prices are analyzed on a more frequent basis if a
significant change in our business necessitates a more timely
analysis or if we experience significant variances in our selling
prices.
Maintenance or service
revenues are recognized ratably over the term of the
contract.
We provide engineering
services to some of our customers on a contractual basis and
recognize revenue using the percentage of completion method or the
completed contract method. We estimate the progress towards
completion on contracts with a fixed-fee arrangement on a monthly
basis utilizing costs incurred to date as a percentage of total
estimated costs at completion of the project or on a milestone
basis based on contractual terms, as appropriate. Short-term
unbilled receivables are included in accounts receivable and
long-term unbilled receivables are included in noncurrent other
assets in the consolidated balance sheet. Total unbilled
receivables at July 31, 2015 and 2014 were $5.2 million and
$5.8 million, respectively. There was no long-term unbilled
receivables at either July 31, 2015 or 2014. When total cost
estimates exceed revenues, we accrue for the estimated losses
immediately.
Deferred revenue is
primarily comprised of maintenance and other service revenues for
which payment has been received and for which services have not yet
been performed. In situations where collection of the receivable is
not reasonably assured, the inventory is expensed upon shipment and
the revenue is recognized as the cash is received. Total deferred
revenue at July 31, 2015 and 2014 was $6.1 million and $11.8
million, respectively. At July 31, 2015 and 2014, the
long-term portion of deferred revenue of $0.9 million and $1.1
million, respectively, was included in non-current other
liabilities.
We grant credit to
domestic and foreign original equipment manufacturers,
distributors, and end users, and perform ongoing credit evaluations
of our customers’ financial condition. We continuously
monitor collections and payments from our customers and maintain a
provision for estimated credit losses based upon specific customer
collection issues that have been identified.
(d) Use of
estimates
The preparation of our
consolidated financial statements in conformity with accounting
principles generally accepted in the United States of America
requires us to make estimates and assumptions that may affect the
reported amounts of assets, liabilities, equity, revenue and
expenses, and related disclosures of contingent assets and
liabilities. On an on-going basis, we evaluate our estimates and
judgments and methodologies. We base our estimates on historical
experience and on various other assumptions that are believed to be
reasonable, the results of which forms the basis for making
judgments about the carrying value of assets and liabilities.
Actual results may differ from those estimates under different
assumptions or conditions. Significant estimates for which changes
in the near term are considered reasonably possible and that may
have a material impact on the financial statements are disclosed in
these Notes to the Consolidated Financial
Statements.
(e)
Inventories
We value inventory at the
lower of cost or market using the first-in, first-out (FIFO)
method. Management assesses the recoverability of inventory based
on types and levels of inventory held, product life cycle, and
changes in technology. A variety of methodologies are used to
determine the amount of inventory write-downs necessary for excess
and obsolete inventory. The write-downs are based upon the age of
the inventory, lower of cost or market, along with other
significant management judgments concerning future demands for the
inventory. Once write-downs are recorded, they are not subsequently
reversed, unless the inventory is used or disposed of. Inventory
includes demo equipment utilized by the sales force in the field as
the company intends to sell such demo equipment. Demo equipment is
amortized on a straight-line basis over a four year period and
included in cost of sales.
(f) Income
taxes
We account for income
taxes under the asset and liability method, which requires
recognition of deferred tax assets, subject to valuation
allowances, and liabilities for the expected future tax
consequences of events that have been included in the financial
statements or tax returns. Deferred income taxes reflect the net
tax effects of temporary differences between the carrying amounts
of asset and liabilities for financial reporting and income tax
purposes. A valuation allowance is established if it is more likely
than not that all or a portion of the net deferred tax assets will
not be realized. We do not provide for U.S. Federal income taxes on
undistributed earnings of all consolidated foreign subsidiaries as
such earnings are considered to be indefinitely reinvested in those
operations. For disclosure purposes, calculations of the potential
deferred income tax liability on these undistributed earnings is
not practicable because such liability, if any, is dependent on
circumstances existing if and when remittance
occurs.
(g) Concentration
of credit risk
Financial instruments
that potentially subject us to concentrations of credit risk
consist principally of cash and cash equivalents, derivative
instruments and accounts receivable. Cash and cash equivalents not
required for working capital purposes are placed primarily in
short-term bank deposits, money market funds, or demand notes of
financial institutions or banks that meet stringent credit rating
requirements or are collateralized by securities issued by the U.S.
government or government agencies. We grant credit to domestic and
foreign original equipment manufacturers, distributors, and end
users, and perform ongoing credit evaluations on our
customers’ financial condition. We do not require collateral
or other security to be furnished by the counterparties to our
derivative instruments.
(h) Property,
plant, and equipment
Property, plant, and
equipment is recorded at cost and depreciated using the
straight-line method over their estimated useful lives. Leasehold
improvements are amortized over the shorter of their estimated
useful lives or the term of the respective leases. Upon retirement
or disposal, the cost of the asset disposed of and the related
accumulated depreciation are removed from the accounts and any gain
or loss is reflected in our Consolidated Statement of Operations.
Expenditures for maintenance and repairs are charged to expense
when incurred while the costs of significant improvements, which
extend the life of the underlying asset, are
capitalized.
Property, plant, and
equipment consisted of the following:
Estimated Useful Lives (Years) July 31,
2015 2014
(in
millions)
Property, plant, and
equipment:
Land and
improvements 15 years for land improvements 6.9 7.5
Building and
improvements 10 to 35 83.0 85.1
Leasehold
improvements lesser of useful life or the lease term 10.0 9.8
Equipment and
software 3 to 7 133.7 129.2
Furniture and
fixtures 5 7.1 7.3
240.7 238.9
Less accumulated
depreciation and amortization (134.4 ) (124.7 )
Total property, plant and
equipment $ 106.3 $ 114.2
Land is not depreciated.
Total depreciation and amortization of property, plant, and
equipment was $14.1 million, $14.3 million, and $13.0 million for
fiscal years 2015, 2014, and 2013, respectively. We did not
capitalize any interest in fiscal years 2015, 2014 or
2013.
(i) Intangible
assets and goodwill
Intangible assets consist
of intellectual property, licenses, and certain identifiable
intangible assets resulting from business combinations, including
trade names, customer relationships, backlog, and developed
technology. Intangible assets that have finite lives are amortized
using either the straight-line method, or if reliably determinable,
based on the pattern in which the economic benefit of the asset is
expected to be utilized. Finite-lived intangible assets are
reviewed for impairment whenever events or changes in circumstances
indicate that the carrying value of assets may not be recoverable.
Recoverability of these assets is measured by comparison of their
carrying value to the future undiscounted cash flows the assets are
expected to generate over their remaining economic life. If such
assets are considered to be impaired, the impairment to be
recognized in earnings equals the amount by which the carrying
value of the assets exceeds their fair value determined by either a
quoted market price, if any, or a value determined by utilizing a
discounted cash flow technique. Evaluation of impairment of
long-lived assets requires estimates of future operating results
that are used in the preparation of the expected future
undiscounted cash flows. Actual future operating results and the
remaining economic lives of long-lived assets could differ from the
estimates used in assessing the recoverability of these assets.
These differences could result in impairment charges, which could
have a material adverse impact on our results of
operations.
An indefinite-lived
intangible asset, such as an in-process research and development,
or IPR&D, or trade names acquired in business combinations, is
tested for impairment annually or more frequently if indicators of
impairment are present. We perform our annual review in our second
quarter of each fiscal year. An indefinite-lived intangible asset
may be considered impaired if we determine that the carrying value
exceeds the assets’ fair value. We may first perform a
qualitative assessment to determine whether it is necessary to
perform the quantitative impairment test or bypass the qualitative
assessment and proceed directly to performing the quantitative
impairment test. The quantitative impairment test is based on
discounted estimated future cash flows. Assessing the impairment of
an indefinite-lived intangible asset requires us to make
assumptions and judgments regarding the fair value of the asset
using the relief from royalty valuation technique, which include
management’s estimates of future growth rates and discount
rates.
Goodwill is not amortized
but is reviewed for impairment annually or more frequently whenever
events or changes in circumstances indicate that the carrying value
of the reporting unit may exceed its fair value. A reporting unit,
for the purpose of the impairment test, is at or below the
operating segment level, and constitutes a business for which
discrete financial information is available and regularly reviewed
by segment management. We perform our annual reviews in our second
quarter of each fiscal year. We may first assess qualitative
factors to determine whether it is more likely than not that the
fair value of a reporting unit is less that its carrying value and
as a basis for determining whether it is necessary to perform the
two-step goodwill impairment test. We may also elect to proceed
directly to the two-step impairment test. If an initial qualitative
assessment indicates that it is more likely than not that the
carrying value of a reporting unit exceeds its estimated fair
value, an additional quantitative evaluation is performed under the
two-step impairment test. If based on the quantitative evaluation
the fair value of the reporting unit is less than its carrying
amount, we perform an analysis of the fair value of all assets and
liabilities of the reporting unit. If the implied fair value of the
reporting unit’s goodwill is determined to be less that its
carrying amount, impairment is recognized for the
difference.
Assessing the impairment
of goodwill requires us to make assumptions and judgments regarding
the fair value of our reporting units. We estimate the fair value
of our reporting units using a combination of valuation techniques,
including discounted cash flows and cash earnings multiples, and
compare the values to our estimated overall market
capitalization.
(j) Fair value of
financial instruments
Our financial instruments
consist primarily of cash and cash equivalents, accounts
receivable, accounts payable and accrued liabilities, and
derivative instruments. The carrying amounts of our financial
instruments approximate fair value due to their short-term nature.
The fair values of marketable securities and investments in pension
and deferred compensation plans, if any, are estimated based on
quoted market price for these securities. We did not have any
marketable securities at July 31, 2015 and
2014.
(k) Asset
retirement obligations
We establish asset
retirement obligations (“AROs”) for the present value
of estimated future costs to return certain of our facilities to
their original condition. The recorded liabilities are accreted to
the future value of the estimated restoration costs. The accretion
of the liability and the depreciation of the capitalized cost are
recognized over the estimated useful lives of the
facilities.
(l) Impairment of
long-lived assets
We evaluate our
long-lived assets whenever events or changes in business
circumstances indicate that the carrying amount of the assets may
not be fully recoverable or that the useful lives of these assets
are no longer appropriate. If indicators of impairment are present
with respect to long-lived assets and undiscounted cash flows
attributable to such assets are not expected to be sufficient to
recover the assets’ carrying amount, additional analysis is
performed as appropriate and the carrying value of the long-lived
assets is written down to its estimated fair value based on a
discounted cash flow analysis or the market
value.
(m) Warranty
costs
We provide for the
estimated cost of standard product warranties at the time products
are shipped. Although we engage in extensive product-quality
programs and processes, our warranty obligations are affected by
product failure rates and service delivery costs incurred to
correct product failures. Should actual product failure rates or
service delivery costs differ from our estimates (which are based
on specific warranty claims, historical data, and engineering
estimates, where applicable), revisions to the estimated warranty
liability would be required. Such revisions could adversely affect
our operating results. Generally, we warrant that our products will
perform in all material respects in accordance with our standard
published specifications in effect at the time of delivery of the
products to our customer for a period ranging from 12 to 60 months
from the date of delivery.
(n) Research and
product development and capitalized software development
costs
Research and product
development costs are expensed as incurred and include primarily
engineering salaries, incentive compensation, including share-based
compensation, overhead and materials used in connection with
research and product development activities. Research and product
development costs related to non-recurring engineering projects
funded by customers are included within engineering cost of sales
if the project is accounted for under the percentage of completion
method or under the completed contract method.
Software development
costs incurred subsequent to establishing technological feasibility
are capitalized when technological feasibility is established
through the general release of the products that contain the
embedded software elements. Technological feasibility is
demonstrated by the completion of a detailed program design.
Capitalized costs are amortized at the higher of
(a) straight-line basis over the economic life of the software
ranging from 3 to 5 years or (b) the ratio of the
product’s current gross revenues to the total of current and
expected gross revenues. Unamortized capitalized software costs are
$0.7 million and $1.1 million as of July 31, 2015 and 2014,
respectively. Amortization expense of capitalized software
development costs was $0.2 million, $0.0 million, and $0.2 million
in fiscal years 2015, 2014, and 2013, respectively, and is included
in product cost of sales.
(o) Derivative
instruments and hedging activities
We recognize all
derivative instruments as either assets or liabilities at fair
value in our consolidated balance sheets. Changes in the fair value
of derivatives are recorded each period in current earnings or
accumulated other comprehensive income (loss), depending on whether
a derivative is designated as part of a hedge transaction. We
classify the cash flows from these instruments in the same category
as the cash flows from the hedged items. We do not enter into
derivative transactions for trading or speculative
purposes.
We assess, both at
inception and on an ongoing basis, whether the derivatives that are
used in hedging transactions are highly effective in offsetting the
changes in cash flows or fair values of the hedged items. We also
assess hedge ineffectiveness on a quarterly basis and record the
gain or loss related to the ineffective portion to current
earnings. If we determine that a forecasted transaction is no
longer probable of occurring, we discontinue hedge accounting for
the affected portion of the hedge instrument, and any related
unrealized gain or loss on the contract is recognized in current
earnings.
(p) Translation of
foreign currencies
The assets and
liabilities of our foreign subsidiaries, whose cash flows are
primarily in their local currency, have been translated into U.S.
dollars using the current exchange rates at each balance sheet
date. The operating results of these foreign subsidiaries have been
translated at average exchange rates that prevailed during each
reporting period. Adjustments resulting from translation of foreign
currency financial statements are reflected as a component of
accumulated other comprehensive income in the consolidated balance
sheet. We had foreign currency translation adjustments of $(12.6)
million, $(0.1) million, and $4.6 million, respectively, included
within the Consolidated Statement of Comprehensive Income in fiscal
years 2015, 2014 and 2013, respectively.
Exchange gains and losses
resulting from foreign currency transactions (transactions
denominated in a currency other than that of the entity’s
functional currency), excluding intercompany transactions
considered to be of a long-term investment nature, are included in
the results of operations in the period in which they occur and are
reflected under the caption “Other, net”. We had
foreign exchange gains (losses) included within the Consolidated
Statement of Operations totaling $(0.4) million, $(0.2) million,
and $(1.5) million in fiscal years 2015, 2014 and 2013,
respectively.
(q)
Advertising
Advertising costs are
expensed when incurred, are included in selling and marketing
expenses and totaled $0.4 million, $0.2 million and $0.2 million in
fiscal years 2015, 2014 and 2013, respectively.
(r) Share-based
compensation
We recognize share-based
compensation expense for equity instruments exchanged for employee
and director services. Share-based compensation cost is measured at
the grant date, based on the fair value of the award, and is
recognized as an expense over the employee’s requisite
service period (generally the vesting period of the equity grant),
net of estimated forfeitures.
We estimate the fair
value of stock options using the Black-Scholes valuation model and
the fair value of our restricted stock awards, which include shares
of restricted stock and restricted stock units, based on the quoted
market price of our common stock or the use of a Monte-Carlo
simulation model. For time or service-based awards, we recognize
the associated share-based compensation expense on a straight-line
basis over the vesting periods of the awards, net of estimated
forfeitures. Forfeiture rates are estimated based on historical
pre-vesting forfeitures and are updated on the vesting dates to
reflect actual forfeitures.
For performance-based
awards with an earnings per share related target, we evaluate the
probability of meeting the performance criteria at each balance
sheet date and if probable, related compensation cost is amortized
over the performance period on a straight-line basis because such
awards vest only at the end of the measurement period. Changes to
the probability assessment and the estimate of shares expected to
vest will result in adjustments to the related share-based
compensation expense that will be recorded in the period of the
change. If the earnings per share related target performance is not
achieved, no compensation cost is recognized and any previously
recognized compensation cost is reversed. For market-based awards,
the compensation cost is amortized over the performance period on a
straight-line basis because the awards vest only at the end of the
measurement period. The probability of actual shares expected to be
earned is considered in the grant date valuation, therefore the
expense is not adjusted to reflect the actual units
earned.
(s) Business
combinations
In accordance with the
acquisition method of accounting, the fair values of assets
acquired and liabilities assumed are determined and recorded as of
the date of the acquisition. Costs to acquire the business are
expensed as incurred. Any excess of the purchase price over
the estimated fair value of the net assets acquired is recorded as
goodwill. Any excess of the fair value of assets acquired over the
purchase price is recorded as a bargain purchase gain in Other
income (expense), net in the Consolidated Statements of
Operations.
(t) Net income per
share
Basic net income per
share is computed using the weighted average number of common
shares outstanding during the period. Diluted net income per share
is computed using the weighted average number of common and
dilutive common equivalent shares outstanding during the period.
Dilutive common equivalent shares consist of stock options and
restricted stock.
(u) Segment
information
We identify a business as
an operating segment if: i) it engages in business activities from
which it may earn revenues and incur expenses; ii) its operating
results are regularly reviewed by our chief operating decision
maker who is our chief executive officer, and iii) it has available
discrete financial information. We aggregate our operating segments
into a reportable segment if the operating segments are determined
to have similar economic characteristics and are similar in the
nature of products and services, nature of production processes,
type or class of customer for their products and services, product
or service distribution method and, if applicable, nature of the
regulatory environment. We have three reportable segments: Medical
Imaging, Ultrasound, and Security and Detection.
(v) New accounting
pronouncements
Recently
adopted
None.
Not yet
effective
Cloud computing
arrangements
In April 2015, the FASB
issued Accounting Standards Update No. 2015-05,
“Customer’s Accounting for Fees Paid in a Cloud
Computing Arrangement,” which amends Accounting Standards
Codification, or ASC, 350, “Intangibles – Goodwill and
Other.” The amendments provide guidance as to whether a cloud
computing arrangement (e.g., software as a service, platform as a
service, infrastructure as a service, and other similar hosting
arrangements) includes a software license and, based on that
determination, how to account for such arrangements. The amendments
are effective for fiscal years, and interim periods within those
years, beginning after December 15, 2015 and may be applied on
either a prospective or retrospective basis. The provisions will be
effective for us in the first quarter of our fiscal year ending
July 31, 2017. Early adoption is not permitted. This update is
effective for us in the first quarter of fiscal year ending
July 31, 2017. We do not expect the adoption of these
provisions to have a material impact on our consolidated financial
statements.
Consolidation
In February 2015, the
FASB issued ASC Update No. 2015-02, “Consolidation
(Topic 810): Amendments to the Consolidation Analysis.”
Update No. 2015-02 amended the process that a reporting entity
must perform to determine whether it should consolidate certain
types of legal entities. Update No. 2015-02 is effective for
annual reporting periods ending after December 15, 2015, and
for annual periods and interim periods thereafter. Early adoption
is permitted. The adoption of this update is not expected to have a
material impact on our financial position or results of
operations.
Revenue from contracts
with customers
In May 2014, the FASB
issued an update which provides guidance for revenue recognition.
This update affects any entity that either enters into contracts
with customers to transfer goods or services or enters into
contracts for the transfer of nonfinancial assets. This update will
supersede existing revenue recognition requirement and most
industry-specific guidance. This update also supersedes some cost
guidance, including revenue recognition guidance for
construction-type and production-type contracts. The update’s
core principle is that a company will recognize revenue when it
transfers promised goods or services to |
