(12)	New Accounting Standards Not Yet Adopted

May

2014,

the FASB issued Accounting Standards Update

2014

09,

Revenue from Contracts with Customers

(“ASU

2014

09”).

ASU

2014

is a comprehensive new revenue recognition model that expands disclosure requirements and requires an entity to recognize revenue when promised goods or services are transferred to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. In

August

2015,

the FASB issued Accounting Standards Update

2015

14,

Revenue from Contracts with Customers (Topic

606):

Deferral of the Effective Date

(“ASU

2015

14”)

which defers the effective date of the new revenue recognition standard by

one

year. Under ASU

2015

14,

the new revenue recognition standard is effective for the Company beginning in fiscal year

2019.

The FASB has also issued ASU

2016

08,

ASU

2016

10,

ASU

2016

11,

ASU

2016

12,

and ASU

2016

all of which clarify certain implementation guidance within ASU

2014

09.

The Company is currently evaluating the impact of the adoption of this guidance on the Company's results of operations, financial position and liquidity and its related financial statement disclosures.

July

2015,

the FASB issued Accounting Standards Update

2015

11,

Simplifying the Measurement of Inventory

(“ASU

2015

11”).

ASU

2015

changes the inventory valuation method from lower of cost or market to lower of cost and net realizable value for inventory valued using

first

-in,

first

-out or average cost. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. ASU

2015

is effective for fiscal years beginning after

December

15,

2016,

including interim periods within those fiscal years, and should be applied prospectively with early adoption permitted. The adoption of ASU

2015

is not expected to have any impact on the Company’s results of operations, financial position or liquidity or its related financial statement disclosures.

February

2016,

the FASB issued Accounting Standards Update

2016

02,

Leases

(“ASU

2016

02”).

ASU

2016

requires the recognition of a separate lease liability representing the required lease payments over the lease term and a separate lease asset representing the right to use the underlying asset during the same lease term. Additionally, this ASU provides clarification regarding the identification of certain components of contracts that would represent a lease as well as requires additional disclosures to the notes of the financial statements. ASU

2016

is effective for fiscal years beginning after

December

15,

2018,

including interim periods within that reporting period with early adoption permitted. The adoption of ASU

2016

is not expected to have a material impact on the Company’s results of operations, financial position or liquidity or its related financial statement disclosures.

OPTICAL CABLE CORPORATION

Condensed Notes to Condensed Consolidated Financial Statements

Three Months Ended

January

31,

2017

(Unaudited)

March

2016,

the FASB issued Accounting Standards Update

2016

09,

Compensation - Stock Compensation (Topic

718):

Improvements to Employee Share-Based Payment Accounting

(“ASU

2016

09”).

ASU

2016

simplifies several aspects related to the accounting for share-based payment transactions, including the accounting for income taxes, forfeitures, statutory tax withholding requirements and classification on the statement of cash flows. ASU

2016

is effective for fiscal years beginning after

December

15,

2016,

including interim periods within that reporting period, with early adoption permitted. The adoption of ASU

2016

is not expected to have a material impact on the Company’s results of operations, financial position or liquidity or its related financial statement disclosures.

August

2016,

the FASB issued Accounting Standards Update

2016

15,

Statement of Cash Flows (Topic

230):

Classification of Certain Cash Receipts and Cash Payments

(“ASU

2016

15”).

ASU

2016

provides guidance related to the classification of certain cash receipts and cash payments on the statement of cash flows. The pronouncement provides clarification guidance on

eight

specific cash flow presentation issues that have developed due to diversity in practice. ASU

2016

is effective for fiscal years beginning after

December

15,

2017,

including interim periods within that reporting period, with early adoption permitted. The adoption of ASU

2016

is not expected to have a material impact on the Company's results of operations, financial position or liquidity or its related financial statement disclosures.

October

2016,

the FASB issued Accounting Standards Update

2016

16,

Income Taxes (Topic

740):

Intra-Entity Transfers of Assets Other Than Inventory

(“ASU

2016

16”).

ASU

2016

requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset (with the exception of inventory) when the transfer occurs. Under current GAAP, entities are prohibited from recognizing current and deferred income taxes for an intra-entity transfer until the asset is sold to a

third

party. Examples of assets that would be affected by the new guidance are intellectual property and property, plant and equipment. ASU

2016

is effective for fiscal years beginning after

December

15,

2017,

including interim periods within that reporting period, with early adoption permitted. The adoption of ASU

2016

is not expected to have a material impact on the Company's results of operations, financial position or liquidity or its related financial statement disclosures.

There are no other new accounting standards issued, but not yet adopted by the Company, which are expected to materially impact the Company’s financial position, operating results or financial statement disclosures.