Note 3 - Recent Accounting Pronouncements

9 Months Ended

May 31, 2017

Notes to Financial Statements

New Accounting Pronouncements and Changes in Accounting Principles [Text Block]

3

.

RECENT ACCOUNTING PRONOUNCEMENTS

As of the beginning of fiscal

2017,

FactSet implemented all applicable new accounting standards and updates issued by the Financial Accounting Standards Board (“FASB”) that were in effect. There were

no

new standards or updates adopted during the

first

nine

months of fiscal

2017

that had a material impact on the consolidated financial statements.

Revenue Recognition

In

May 2014

and

July 2015,

the FASB issued accounting standard updates which provide clarified principles for recognizing revenue arising from contracts with clients and supersede most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that an entity recognizes revenue to depict the transfer of promised goods or services to clients in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. These accounting standard updates will be effective for FactSet beginning in the

first

quarter of fiscal

2019,

with early adoption in fiscal

2018

permitted and allow for either full retrospective or modified retrospective adoption. The Company is currently evaluating the impact of these accounting standard updates on its consolidated financial statements and the method of adoption.

Balance Sheet Classification of Deferred Taxes

In

November 2015,

the FASB issued an accounting standard update to simplify the presentation of deferred taxes on the balance sheet. The accounting standard update will require an entity to present all deferred tax assets and deferred tax liabilities as non-current on the balance sheet. Under the current guidance, entities are required to separately present deferred taxes as current or non-current. Netting deferred tax assets and deferred tax liabilities by tax jurisdiction will still be required under the new guidance. This guidance will be effective for FactSet beginning in the

first

quarter of fiscal

2018,

with early adoption in fiscal

2017

permitted. The accounting standard update is a change in balance sheet presentation only and, as such, the Company does

not

believe this new accounting standard update will have a material impact on its consolidated financial statements.

Recognition and Measurement of Financial Assets and Financial Liabilities

In

January 2016,

the FASB issued an accounting standard update to amend its current guidance on the classification and measurement of certain financial instruments. The accounting standard update significantly revises an entity’s accounting related to the presentation of certain fair value changes for financial liabilities measured at fair value. This guidance also amends certain disclosure requirements associated with the fair value of financial instruments. This guidance will be effective for FactSet beginning in the

first

quarter of fiscal

2019.

The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements.

Leases

In

February 2016,

the FASB issued an accounting standard update related to accounting for leases. The guidance introduces a lessee model that requires most leases to be reported on the balance sheet. The accounting standard update aligns many of the underlying principles of the new lessor model with those in the FASB’s new revenue recognition standard. The guidance also eliminates the requirement in current U.S. GAAP for an entity to use bright-line tests in determining lease classification. This accounting standard update will be effective for FactSet beginning in the

first

quarter of fiscal

2020,

with early adoption in fiscal

2019

permitted. The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements.

Share-Based Payments

In

March 2016,

the FASB issued an accounting standard update which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flow. This accounting standard update will be effective for FactSet beginning in the

first

quarter of fiscal

2018.

The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements.

On

May 2017,

the FASB issued an accounting standard updated, which amends the scope of modification accounting for share-based payment arrangements. The guidance focuses on changes to the terms or conditions of share-based payment awards that would require the application of modification accounting and specifies that an entity would

not

apply modification accounting if the fair value, vesting conditions and classification of the awards are the same immediately before and after the modification. This accounting standard update will be effective for FactSet beginning in the

first

quarter of fiscal

2019,

with early adoption permitted. The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements

Cash Flow Simplification

In

August 2016,

the FASB issued an accounting standard update which simplifies how certain transactions are classified in the statement of cash flows. This includes revised guidance on the cash flow classification of debt prepayments and debt extinguishment costs, contingent consideration payments made after a business combination and distributions received from equity method investments. The guidance is intended to reduce diversity in practice across all industries. This accounting standard update will be effective for FactSet beginning in the

first

quarter of fiscal

2019.

The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements.

Income Taxes on

Intra-Entity Transfer

s of Asset

s

In

October 2016,

the FASB issued an accounting standard update which removes the prohibition against the immediate recognition of the current and deferred income tax effects of intra-entity transfers of assets other than inventory. The guidance is intended to reduce diversity in practice related to the tax consequences of certain types of intra-entity asset transfers, particularly those involving intellectual property. This accounting standard update will be effective for FactSet beginning in the

first

quarter of fiscal

2019.

The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements.

Goodwill Impairment Test

In

January 2017,

the FASB issued an accounting standard update which removes the requirement for companies to compare the implied fair value of goodwill with its carrying amount as part of step

2

of the goodwill impairment test. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value,

not

to exceed the carrying amount of goodwill. This accounting standard update will be effective for FactSet beginning in the

first

quarter of fiscal

2021,

with early adoption permitted for any impairment tests performed after

January 1, 2017.

The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements.

No

other new accounting pronouncements issued or effective as of

May 31, 2017

have had or are expected to have an impact on the Company’s consolidated financial statements.