Recent Accounting Pronouncements

9 Months Ended

Sep. 30, 2019

Note 18. Recent Accounting Pronouncements

We adopted ASC 842, as of January 1, 2019, using the modified retrospective approach. The modified retrospective approach provides a method for recording existing leases at the beginning of the period of adoption. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward the historical lease classification and we elected the hindsight practical expedient to determine the lease term for existing leases. We determined that the exercise of our renewal option associated with our lease of facility in Fremont, California, would be reasonably certain in determining the expected lease term. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods.

Adoption of the new standard resulted in the recording of net lease assets of $1.1 million and lease liabilities of $1.1 million, as of January 1, 2019. The standard did not have an impact on our consolidated results of operations or cash flow.

The impact of the adoption of ASC 842 on the balance sheet as of January 1, 2019 was (in thousands):


	As Reported		Adoption of ASC 842			Balance
	December 31, 2018		Increase (Decrease)			January 1, 2019
Operating lease right-of-use assets	$	—	$	1,086		$	1,086
Total assets		223,524		1,086			224,610
Accrued liabilities		15,371		128	*		15,499
Total current liabilities		28,709		128			28,837
Long-term liability - operating leases		—		958			958
Total liabilities		28,992		1,086			30,078
Total liabilities and equity		223,524		1,086			224,610

* Short-term portion of lease liability included in accrued liabilities