RECENT ACCOUNTING STANDARDS

Recently Adopted Accounting Standards

Revenue Recognition

In May 2014 and May 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2014-09, Revenue from Contracts with Customers and ASU 2016-12, Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients, respectively. The standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes previous revenue recognition guidance. We adopted this guidance on July 1, 2018, the start to our first quarter of fiscal 2019, using the modified retrospective method. There was no cumulative catch-up adjustment upon adoption of this guidance.

Our revenue from contracts with customers is generated through the sale of products, which consists of a single performance obligation. We recognize revenue at a point in time in an amount that reflects the fair value of the consideration to be received for the products sold, net of sales tax and other tax amounts collected from customers for remittance to governmental authorities. We elected to account for shipping and handling activities as a fulfillment cost.

Our contracts with customers are typically comprised of a customer purchase order and/or an executed agreement. Our payment terms vary by customer and location, however, the time period between when revenue is recognized and when payment is due is not significant. Before accepting a new customer, we review publicly available information and credit rating databases to provide ourselves with reasonable assurance that the new customer will pay all outstanding amounts in accordance with our standard terms. For existing customers, we monitor historic payment patterns and we perform ongoing credit evaluations to assess whether we can expect payment in accordance with the terms set forth in the agreement under which the sale was made.

We satisfy the performance obligation and record revenues when transfer of control of our product has passed to the customer. We specify delivery terms in the agreement under which the sale was made and assess each shipment against those terms, and only recognize revenue when we are certain that the delivery terms have been met and transfer of control has occurred.

Our sales terms do not allow for a right of return, except for matters related to manufacturing defects, which are covered under our warranty. Our warranties are considered an assurance-only type of service.

See Note 11, Geographic Information, Product Groups, Market Applications and Customer Concentration Information, for a presentation of revenue disaggregated by geography and product group.

We elected to apply the practical expedient to recognize the incremental costs of obtaining a contract, specifically sales commissions and other contract administration costs, when incurred because the amortization period for these costs is one year or less.

Cash Flows

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows: Restricted Cash to standardize the presentation of transfers between cash and restricted cash in the cash flow statement. We adopted this guidance in the first quarter of 2019, and as a result, restricted cash has been included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets for the periods indicated that sum to the total of the same such amounts shown in the condensed consolidated statement of cash flows:



	September 29, 2018		September 30, 2017
	(Thousands)
Cash and cash equivalents	$	337,920	$	192,420
Restricted cash	—		268
Total cash, cash equivalents and restricted cash shown in the statement of cash flows	$	337,920	$	192,688

Recent Accounting Standards Pending Adoption

In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General: Disclosure Framework, which amends the disclosure requirements for single-employer defined benefit plans, removing disclosures that are not considered cost-beneficial, clarifying the specific requirements of disclosures, and adding disclosure requirements identified as relevant. The guidance will be effective for us at the end of fiscal 2021, with early adoption permitted. We are currently evaluating the likely impact the implementation of this standard will have on our financial statements and footnote disclosures.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement: Disclosure Framework, which aims to improve the effectiveness of fair value measurement disclosures. The amendments ASU-2018-13 modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, based on the concepts in FASB Concepts Statement, Conceptual Framework for Financial Reporting—Chapter 8: Notes to Financial Statements, including the consideration of costs and benefits. The guidance will be effective for us in the first quarter of fiscal 2021, with early adoption permitted. We are currently evaluating the likely impact the implementation of this standard will have on our financial statements and footnote disclosures.

In February 2016, the FASB issued ASU 2016-02, Leases, which requires recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. In July 2018, the FASB issued ASU 2018-11, Leases: Targeted Improvements, which provide entities with an additional (and optional) transition method to adopt the new lease requirements by allowing entities to initially apply the requirements by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The guidance also provides lessors with a practical expedient, by class of underlying asset, to not separate nonlease components from the associated lease component and, instead, to account for those components as a single component if certain conditions are met. This guidance will be effective for us in the first quarter of fiscal 2020, with early adoption permitted. We are currently evaluating the likely impact the implementation of this standard will have on our financial statements and footnote disclosures.

In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the TCJA. The guidance will be effective for us in the first quarter of fiscal 2020, with early adoption permitted. We are currently evaluating the likely impact the implementation of this standard will have on our financial statements and footnote disclosures.