Accounting Standards Adopted in Current Year

12 Months Ended

Jan. 02, 2021

Accounting Changes And Error Corrections [Abstract]

Accounting Standards Adopted in Current Year

3. Accounting Standards Adopted in Current Year

In June 2016, the Financial Accounting Standards Board (the “FASB”) issued updated guidance replacing the incurred loss impairment method with a method that reflects expected credit losses. The effective date of the new guidance for public companies is for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. Early adoption is permitted. On December 29, 2019, the Company adopted the updated credit loss guidance on a prospective basis, which did not have a material impact on the Company’s consolidated financial statements.

In August 2018, the FASB issued updated guidance addressing customer’s accounting for implementation costs incurred in a cloud computing arrangement that is a service contract, which requires customers to apply internal-use software guidance to determine the implementation costs that are able to be capitalized. Capitalized implementation costs are required to be amortized over the term of the arrangement, beginning when the cloud computing arrangement is ready for its intended use. The effective date of the new guidance for public companies is for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. Early adoption is permitted. On December 29, 2019, the Company adopted the updated guidance on a prospective basis to all software implementation costs incurred after the date of adoption. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.