RECENTLY ADOPTED ACCOUNTING STANDARDS

12 Months Ended

Dec. 31, 2019

Accounting Changes and Error Corrections [Abstract]

Recently Adopted Accounting Standard

RECENTLY ADOPTED ACCOUNTING STANDARDS

In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU No. 2016-02, Leases, ("ASC Topic 842"), which we adopted on January 1, 2019, using a modified retrospective method, applying the new standard to all leases existing at the date of initial application. We used the effective date as our date of initial application. Consequently, financial information will not be updated, and disclosures required under the new standard will not be provided for dates before January 1, 2019.

The new standard requires lessees to recognize lease assets and liabilities on their balance sheet for those leases classified as operating leases under previous GAAP. These assets and liabilities are recorded generally at the present value of the contracted lease payments, using the rate implicit in the lease if known. If the implicit rate is not known, we use our estimated incremental borrowing rate.

We do not account for lease and non-lease components separately and we do not apply the requirements of ASC Topic 842 to short-term leases with a term of one year or less at inception. Lease expense is recognized on a straight-line basis over the lease term.

As a result of adopting the new standard, we recorded operating lease right-of-use ("ROU") assets of $5.9 million and operating lease liabilities of $6.1 million on January 1, 2019.