Accounting Pronouncements

3 Months Ended

Mar. 31, 2020

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

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

Accounting Pronouncements

Recently Adopted Accounting Standards

Financial Instruments - Credit Losses. In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Information." The amendments in this update require entities to measure all expected credit losses of financial assets held at a reporting date based on historical experience, current conditions and reasonable and supportable forecasts in order to record credit losses in a more timely manner. ASU 2016-13 also amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The Company adopted this standard in the first quarter of 2020 utilizing a modified-retrospective approach and determined the only financial instrument that the Company currently holds and is required to measure under ASU 2016-13 is its trade receivables. Under this standard, the Company considers forecasts of future economic conditions in addition to the historical data utilized prior to ASU 2016-13 when measuring the reserve for trade receivables. The Company evaluated its reserve for trade receivables in light of the new guidance and determined that no adjustment was necessary to the amount recorded as of January 1, 2020.

Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. In August 2018, the FASB issued ASU 2018-15, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract." The new guidance aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The Company adopted and prospectively applied the new guidance in the first quarter of 2020, which did not have a material effect on the Condensed Consolidated Financial Statements upon adoption. Beginning in the first quarter of 2020, the Company records capitalized implementation costs incurred in a hosting arrangement that is a service contract in Other Current Assets and records the related amortization expense in Other Operation and Maintenance in the Company's Condensed Consolidated Balance Sheet and Statement of Income, respectively.

Disclosure Framework. In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement" and ASU 2018-14, "Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans." The new guidance removes, adds, modifies or clarifies disclosure requirements that impact all levels of the fair value hierarchy, as well as investments measured using the net asset value practical expedient, and disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans, respectively. The Company adopted these standards in the first quarter of 2020 and applied the new guidance either retrospectively or prospectively, depending upon the specific disclosure change. ASU 2018-13 and ASU 2018-14 did not have a significant impact on the Company's financial statement disclosures.

Reference Rate Reform. In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting." The new guidance provides optional expedients and exceptions, if certain criteria are met, for applying GAAP to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. Contracts modified between March 12, 2020 and December 31, 2022 as a result of reference rate reform are eligible for these expedients and exceptions. The Company adopted ASU 2020-04 in the first quarter of 2020 and does not expect this standard to have a material impact on the Company's consolidated financial statements.