Accounting Standards Updates

We consider the applicability and impact of all Accounting Standards Updates ("ASUs"). ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial position or results of operations.



Standard	Description	Date of Adoption	Application	Effect on the Consolidated Financial Statements (or Other Significant Matters)
ASU 2017-04, Intangibles— Goodwill and Other (Topic 350)	The primary amendments in this update simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under the amendments of this update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value.	January 1, 2017	Prospective	We early adopted this update to reduce the cost and complexity of our annual and interim goodwill impairment analyses. There was no material impact on our consolidated financial statements.
ASU 2014-09, Revenue from Contracts with Customers (Topic 606)	This update supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, by creating a new Topic 606, Revenue from Contracts with Customers. The guidance in this update affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the trade of nonfinancial assets unless those contracts are within the scope of other standards. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Additionally, various updates have been issued during 2015 and 2016 to clarify the guidance in Topic 606.	January 1, 2018	1) Retrospectively to each prior reporting period presented, or 2) retrospectively with the cumulative effect of initially applying these updates recognized at the date of initial application.	We will adopt the provisions of the new standard as of January 1, 2018. For additional information, see below. (1)
ASU 2016-02, Leases (Topic 842)	The primary amendments in this update require the recognition of lease assets and lease liabilities on the balance sheet, as well as certain qualitative disclosures regarding leasing arrangements.	January 1, 2019	Modified retrospective	We are currently in the planning stage and have not yet begun implementation of the new standard. We have not yet determined the potential impact to our consolidated financial statements.
ASU 2016-15, Statement of Cash Flows (Topic 230)	This update clarifies the guidance regarding the classification of operating, investing, and financing activities for certain types of cash receipts and payments.	January 1, 2018	Retrospective	Upon adoption, approximately $400 thousand of our loss on extinguishment of debt that occurred in 2017 will be retrospectively reclassified from operating to financing cash flows. We are currently unaware of any other material impacts of adoption on our consolidated financial statements.
ASU 2016-17, Consolidation (Topic 810)	This update amends the consolidation guidance on how a reporting entity that is the single decision maker of a variable interest entity (VIE) should treat indirect interests in the entity held through related parties that are under common control with the reporting entity when determining whether it is the primary beneficiary of that VIE. The primary beneficiary of a VIE is the reporting entity that has a controlling financial interest in a VIE and, therefore, consolidates the VIE.	January 1, 2017	Retrospective	We adopted this update as of January 1, 2017, and there was no material impact to our consolidated financial statements.
ASU 2017-09, Compensation—Stock Compensation (Topic 718)	This update clarifies the guidance regarding changes in the terms or conditions of a share based payment award. Under the amendments of this update, an entity should account for the effects of a modification unless certain criteria remain the same immediately before and after the modification.	January 1, 2018	Prospective	We will adopt this update as of January 1, 2018, and do not anticipate any material impact to our consolidated financial statements.

(1)

We adopted the provisions of ASU 2014-09 as of January 1, 2018 on a modified retrospective basis. Our assessment of the impact included the review of the majority of our revenue streams, contracts and contract costs incremental to obtaining the contract. We concluded the impact to the way we recognize revenue is immaterial because our revenue is primarily generated from monthly subscriptions and longer-term breach contracts, which are currently recognized ratably over the service delivery period. In addition, we elected a practical expedient to immediately expense the majority of our incremental commission costs, which will not have a material impact to our future results of operations.

We also concluded that our deferred subscription solicitation and advertising costs must be expensed as incurred under the new standard. Since we currently defer certain subscription solicitation and advertising costs and amortize these costs to expense over the period during which benefits are expected to be received not to exceed twelve months, we believe this is a significant change that will impact our future results of operations on each reportable period.

As a result of our comprehensive assessment, we expect to record a cumulative adjustment of approximately $1.3 million to our stockholders’ equity upon adoption. Given the continued valuation allowance on our net deferred taxes, the tax effect of these cumulative adjustments at adoption is also immaterial to the consolidated financial statements. We identified the need for changes to our accounting policies, practices and controls to support the new revenue recognition standard, which we continue to assess and implement after adoption but before our next reporting period. We expect to provide the enhanced disclosures required by ASU 2014-09 in our next filing.