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Basis of Presentation and Summary of Significant Accounting Polices (Policies)

12 Months Ended

Dec. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

The Company’s revenues are generally recurring in nature and historically have been derived primarily from convenience transaction fees (or "surcharge"), which are paid by cardholders, as well as other transaction-based fees, including interchange fees, which are paid by the cardholder’s financial institution for the use of the ATMs serving their customers and connectivity to the applicable electronic funds transfer ("EFT") network that transmits data between the ATM and the cardholder’s financial institution. Other revenue sources include: (i) fees from financial institutions that participate in the Company's Allpoint network ("Allpoint"), the world's largest retail-based surcharge-free ATM network (based on the number of participating ATMs), (ii) fees for bank-branding ATMs and providing financial institution cardholders with surcharge-free access, (iii) revenues earned by providing managed services (solutions and transaction processing services) to retailers and financial institutions, (iv) fees earned from foreign currency exchange transactions at the ATM, known as dynamic currency conversion (“DCC”), and (v) revenues from the sale of ATMs and ATM-related equipment and other ancillary services. See Note 3. Revenue Recognition for additional information related to revenue streams and policy.

Consolidation

The consolidated financial statements include the accounts of the Company. All material intercompany accounts and transactions have been eliminated in consolidation. The Company owns a majority (95.7%) interest in, and realizes a majority of the earnings and/or losses of Cardtronics Mexico, S.A. de C.V.; thus this entity is reflected as a consolidated subsidiary in the financial statements, with the remaining ownership interests not held by the Company being reflected as noncontrolling interests.

Basis of Presentation

In management’s opinion, all normal recurring adjustments necessary for a fair presentation of the Company’s current and prior period results have been made.

Use of Estimates in the Preparation of the Consolidated Financial Statements

Use of Estimates in the Preparation of the Consolidated Financial StatementsThe preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of this Annual Report on Form 10-K for the year ended December 31, 2020 (the “2020 Form 10-K”) and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates include the carrying amount of intangibles, long-lived asset impairments, goodwill, asset retirement obligations (“ARO”), acquisition related contingent consideration liability, and valuation allowances for receivables, inventories, and deferred income tax assets. Additionally, the Company is required to make estimates and assumptions related to the valuation of its derivative instruments and share-based compensation. Actual results could differ from those estimates and these differences could be material to the consolidated financial statements.

Cost of ATM Operating Revenues Presentation

Cost of ATM Operating Revenues PresentationThe Company presents the Cost of ATM operating revenues in the accompanying Consolidated Statements of Operations exclusive of depreciation, accretion, and amortization of intangible assets related to ATMs and ATM-related assets.

Restructuring Expenses

Restructuring ExpensesDuring 2020, the Company implemented cost reduction initiatives intended to improve its cost structure and operating efficiency partly in response to the impacts of the COVID-19 pandemic (the "Pandemic"). During the years ended December 31, 2020, 2019, and 2018, the Company incurred $9.4 million, $8.9 million and $6.6 million, respectively, of pre-tax expenses related to its restructuring plans. These restructuring activities included costs incurred in conjunction with facilities closures, workforce reductions, professional fees and other related charges.

Cash, Cash equivalents, and Restricted Cash

Cash, Cash Equivalents, and Restricted CashFor purposes of reporting financial condition, cash and cash equivalents include cash in bank and short-term deposit accounts and physical cash. Additionally, the Company maintains cash on deposit with banks that is pledged for a particular use or restricted to support a liability. Restricted cash largely consists of amounts collected on behalf of, but not yet remitted to, certain of the Company’s merchant customers or third-party service providers. Restricted cash in current assets is offset by a corresponding liability balance in the Accrued liabilities line in the Consolidated Balance Sheets. The changes in the settlement liabilities corresponding to the changes in the balance of restricted cash during the years ended 2020, 2019, and 2018 are presented in the Statements of Cash Flows within the Increase (decrease) in restricted cash liabilities line.

ATM Cash Management Program

ATM Cash Management ProgramThe Company relies on arrangements with various banks to provide the cash that it uses to fill its Company-owned, and in some cases merchant-owned and managed services ATMs. The Company refers to such cash as “vault cash”. The Company pays a monthly rental fee based on the average outstanding vault cash balance, as well as fees related to the bundling and preparation of such cash prior to it being loaded in the ATMs. At all times, beneficial ownership of the cash is retained by the vault cash providers and the Company has no right or access to the cash except for the ATMs that are serviced by the Company’s wholly-owned cash-in-transit operations in the U.K. While the U.K. cash-in-transit operations have physical access to the cash loaded in the ATMs, beneficial ownership of that cash remains with the vault cash provider at all times. The Company’s vault cash arrangements expire at various times through December 2025. Based on the foregoing, the ATM vault cash, and the related obligations, are not reflected in the consolidated financial statements.

Accounts and Notes Receivable, net

Accounts and notes receivable are comprised of amounts due from the Company’s clearing and settlement banks for transaction revenues earned on transactions processed during the month ending on the balance sheet date, as well as receivables from surcharge-free network customers, bank-branding and network-branding customers, managed services customers and for ATMs and ATM-related equipment sales and service. Trade accounts receivable are recorded at the invoiced amount and do not bear interest. On January 1, 2020, the Company adopted Accounting Standards Update ("ASU") 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and related amendments (collectively, "Topic 326"), via a cumulative-effect adjustment to opening retained earnings. Topic 326 replaced the incurred loss impairment model under which credit losses were recognized when probable.

The allowance for credit losses represents the Company’s best estimate of the future expected credit losses on the Company's existing accounts and notes receivable. The Company assessed the likelihood of collection of its receivables utilizing historical loss rates and current market conditions that included the estimated impact of the COVID-19 pandemic. Refer to Note 2. New Accounting Pronouncements for additional information on the development of the Company's estimate of expected credit losses.

Inventory

Inventory, netThe Company’s inventory is determined using the average cost method. The Company periodically assesses its inventory, and as necessary, adjusts the carrying values to the lower of cost or net realizable value.

Property and Equipment, net

Property and equipment are stated at cost and depreciation is calculated using the straight-line method over estimated useful lives ranging from three to ten years. Most new ATMs are depreciated over eight years and most refurbished ATMs and installation-related costs are depreciated over five years, all on a straight-line basis. Leasehold improvements are depreciated over the useful life of the asset or the lease term, whichever is shorter.

Also reported in property and equipment are ATMs and the associated equipment the Company has acquired for future installation or has temporarily removed from service and plans to re-deploy. Significant refurbishment costs that extend the useful life of an asset, or enhance its functionality, are capitalized and depreciated over the estimated remaining life of the improved asset. Property and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable.

In most of the Company’s markets, maintenance services on ATMs are generally performed by third-party service providers and are generally incurred as a fixed fee per month per ATM. In the U.K., Australia, Canada, and South Africa, maintenance services are, to differing degrees, performed by in-house technicians as well. In all cases, maintenance costs are expensed as incurred.

Included within property and equipment are also costs associated with internally-developed technology assets and implementation costs associated with the Company's enterprise resource planning ("ERP") system. The Company capitalizes certain internal and external costs associated with developing new or enhanced products and technology that are expected to benefit multiple future periods through enhanced revenues and/or cost savings and efficiencies. Internally developed projects are placed into service and depreciation is commenced once available for use. These projects are generally depreciated on a straight-line basis over estimated useful lives of three to nine years.

Intangible Assets Other Than Goodwill

The Company’s intangible assets include merchant and bank-branding contracts/relationships acquired in connection with business acquisitions and asset acquisitions of ATMs and ATM-related assets (i.e., the right to receive future cash flows related to transactions occurring at these ATM locations). They also include exclusive license agreements and site acquisition costs (i.e., the right to be the exclusive ATM provider at specific ATM locations), trade names, technology, non-compete agreements, and deferred financing costs relating to the Company’s revolving credit facility.

The estimated fair value of the merchant and bank-branding contracts/relationships within each acquired portfolio is determined based on the estimated net cash flows and useful lives of the underlying merchant or bank-branding contracts/relationships, including expected renewals. The contracts/relationships comprising each acquired portfolio are typically similar in nature with respect to the underlying contractual terms and conditions. Accordingly, the Company generally pools such acquired contracts/relationships into a single intangible asset, by acquired portfolio, for purposes of computing the related amortization expense. The Company amortizes such intangible assets on a straight-line basis over the estimated useful lives of the portfolios to which the assets relate. The estimated useful life of each portfolio is determined based on the weighted average lives of the expected cash flows associated with the underlying contracts/relationships comprising the portfolio and takes into consideration expected renewal rates and the terms and significance of the underlying contracts/relationships themselves. Costs incurred by the Company to renew or extend the term of a contract/relationship intangible are expensed as incurred, except for any direct payments made to the merchants, which are set up as prepaid merchant fees. Certain acquired merchant and bank-branding contracts/relationships may have unique attributes, such as significant contractual terms or value, and in such cases, the Company will separately account for these contracts/relationships in order to better assess the value and estimated useful lives of the underlying contracts/relationships.

The Company tests its acquired merchant and bank-branding contract/relationship assets for impairment, on an individual contract/relationship basis for the Company’s significant contracts/relationships, and on a portfolio basis for all other acquired contracts/relationships. If, subsequent to the acquisition date, circumstances indicate that a shorter estimated useful life is warranted for an acquired portfolio or an individual contract/relationship as a result of changes in the expected future cash flows, then the individual contract/relationship or portfolio’s remaining estimated useful life and related amortization expense are adjusted accordingly on a prospective basis.

Whenever events or changes in circumstances indicate that an intangible asset may be impaired, the Company evaluates the recoverability of the intangible asset and related ATMs, if applicable, by measuring the related carrying amounts against the estimated undiscounted future cash flows associated with the related assets or portfolio of assets. Should the sum of the expected future net cash flows be less than the carrying values of the intangible assets being evaluated, an impairment loss would be recognized. The impairment loss would be calculated as the amount by which the carrying values of the ATMs and intangible assets exceeded the calculated fair value.

Goodwill

GoodwillIncluded within the Company’s assets are goodwill balances that have been recognized in conjunction with the purchase accounting for completed business combinations. Under U.S. GAAP, goodwill is not amortized but is evaluated periodically for impairment. The Company performs this evaluation annually as of December 31, or more frequently if there are indicators that

suggest the fair value of a reporting unit may be below its carrying value. It has been the Company's practice to initially assess qualitative factors to determine whether it is necessary to perform a quantitative goodwill impairment. If necessary, quantitative evaluations are performed at a reporting unit level. However, given the Company's statutory accounting and reporting obligations and the passage of time since the Company's last quantitative test, the Company elected to perform a quantitative test at December 31, 2020.

The Company's reporting units have been determined based on several factors, including (i) whether or not the group has any recorded goodwill, (ii) the availability of discrete financial information, and (iii) how business unit performance is measured and reported. The Company has identified seven separate reporting units for its goodwill assessments: (i) the U.S. and Puerto Rico operations, (ii) the Canada operations, (iii) the Mexico operations, (iv) the U.K. operations, (v) the Germany operations, (vi) the South Africa operations, and (vii) the Australia and New Zealand operations. There was no goodwill associated with the Spain or Ireland operations as of December 31, 2020.

When estimating the fair value of a reporting unit in a quantitative goodwill impairment test, the Company uses an income approach that incorporates both management’s views and those of the market. The Company prepares a discounted cash flow model to estimate the fair value and reconciles the resulting fair values to its market capitalization plus an estimated control premium. In the event of an impairment, the Company has historically utilized the fair value derived from a pure discounted cash flow model as the basis for a recognized impairment loss, comparing the fair value of a reporting unit with its carrying amount and, if applicable, recording an impairment in the amount by which the carrying amount exceeds the fair value.

Goodwill Impairment Evaluation as of December 31, 2020

For the quantitative assessment prepared as of December 31, 2020, the Company prepared a current 5-year cash flow forecast for each reporting unit and utilized discount rates ranging from 8.8% to 13.2%. Based on the results of the quantitative assessment, the Company determined that the carrying value of its reporting units exceeded their fair value.

As of December 31, 2020, the majority of the Company’s reporting units were determined to have fair values significantly in excess of their carrying values. However, the Company recognized a goodwill impairment of $7.3 million in 2019 to reduce the carrying amount of its Canada reporting unit to its fair value. As of December 31, 2020, the Canada reporting unit goodwill was $106.3 million and the fair value of the Canada reporting unit exceeded its carrying value by approximately 14%. To the extent that the Company is unable to perform in accordance with current projections, including the estimated impact of the Pandemic and certain efficiencies and marginally improved cash flows in the future, further impairment charges are possible.

All of the assumptions utilized in performing qualitative and quantitative assessments of reporting unit fair value are inherently uncertain and require significant judgment on the part of the Company. To the extent that the Company is unable to perform in accordance with its projections, further impairment charges are possible.

Income Taxes

Income TaxesProvisions for income taxes are based on taxes payable or refundable for the current year and deferred taxes, which are based on temporary differences between the amount of taxable income and income before provision for income taxes and between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements. Deferred tax assets and liabilities are reported in the consolidated financial statements at current income tax rates. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. As the ultimate realization of deferred tax assets is dependent on the generation of future taxable income during the periods in which those temporary differences become deductible, the Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. In the event the Company does not believe it is more likely than not that it will be able to utilize the related tax benefits associated with deferred tax assets, valuation allowances will be recorded to reserve for the assets, see Note 20. Income Taxes.

Asset Retirement Obligations (“ARO”)

Asset Retirement Obligations (“ARO”)The Company estimates the fair value of future ARO expenditures associated with the costs to deinstall its ATMs, and in some cases, restore the ATM sites to their original condition. ARO estimates are based on a number of assumptions, including: (i) the types of ATMs that are installed, (ii) the relative mix where the ATMs are installed (i.e., whether such ATMs are located in single-merchant locations or in locations associated with large, geographically-dispersed retail chains), (iii) whether the Company will ultimately be required to refurbish the merchant store locations upon the removal of the related ATMs, and (iv) the timing of the estimated ARO payments. The Company recognizes the fair value of future ARO expenditures as a liability on a pooled basis based on the estimated deinstallation dates in the period in which it is incurred and can be reasonably estimated. The Company’s fair value estimates of liabilities for ARO’s generally involve discounted future cash flows based on the historical experience of deinstallation. ARO costs are capitalized as part of the carrying amount of the related long-lived asset and depreciated over the asset’s estimated useful life, which is based on the average time period that an ATM is installed in a location before being deinstalled. Subsequent to recognizing the initial liability, the Company recognizes an ongoing expense for changes in such liabilities due to the passage of time (i.e., accretion expense), which is recorded in the Depreciation and accretion expense line in the accompanying Consolidated Statements of Operations. As the liability is not revalued on a recurring basis, it is periodically reviewed for reasonableness based on current machine count and updated cost estimates to deinstall ATMs. Upon settlement of the liability, the Company recognizes a gain or loss for any difference between the settlement amount and the liability recorded, which is recorded in the Depreciation and accretion expense line in the accompanying Consolidated Statements of Operations. For additional information related to the Company’s AROs, see Note 12. Asset Retirement Obligations.

Share-Based Compensation

Share-Based CompensationThe Company calculates the fair value of share-based awards to its Board of Directors (the “Board”) and employees on the date of grant and recognizes the calculated fair value, net of estimated forfeitures, as share-based compensation expense over the underlying requisite service periods of the related awards. For additional information related to the Company’s share-based compensation, see Note 4. Share-Based Compensation.

Derivative Financial Instruments

The Company utilizes derivative financial instruments to hedge its exposure to changing interest rates related to the Company’s ATM cash management activities, its exposure to changing interest rates on its revolving credit facility and term loan facility and, on a limited basis, the Company’s exposure to foreign currency transactions. The Company does not enter into derivative transactions for speculative or trading purposes, although circumstances may subsequently change the designation of its derivatives to economic hedges.

The Company records derivative instruments at fair value in the accompanying Consolidated Balance Sheets. These derivatives, which consist of interest rate swap, interest rate caps and foreign currency forward contracts, are valued using pricing models based on significant other observable inputs (Level 2 inputs under the fair value hierarchy prescribed by U.S. GAAP), while taking into account the creditworthiness of the party that is in the liability position with respect to each trade. The majority of the Company’s derivative instruments have been accounted for as cash flow hedges, and accordingly, changes in the fair values of such derivatives have been reported in the Accumulated other comprehensive loss, net line in the accompanying Consolidated Balance Sheets. For additional information related to the Company’s derivative financial instruments, see Note 16. Derivative Financial Instruments.

Fair Value of Financial Instruments

Fair Value of Financial InstrumentsThe fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. U.S. GAAP does not require the disclosure of the fair value of lease financing arrangements and non-financial instruments, including intangible assets such as goodwill and the Company’s merchant and bank-branding contracts/relationships. For additional information related to the Company’s fair value evaluation of its financial instruments, see Note 18. Fair Value Measurements.

Foreign Currency Exchange Rate Translation

As a result of its global operations, the Company is exposed to market risk from changes in foreign currency exchange rates. The functional currencies of these international subsidiaries are their respective local currencies. The results of operations of the Company’s international subsidiaries are translated into U.S. dollars using average foreign currency exchange rates in effect during the periods in which those results are recorded and the assets and liabilities are translated using the foreign currency exchange rate in effect as of each balance sheet reporting date. These resulting translation adjustments to assets and liabilities have been reported in Accumulated other comprehensive loss, net within the accompanying Consolidated Balance Sheets.

The Company currently believes that the unremitted earnings of certain of its subsidiaries will be reinvested in the corresponding country of origin for an indefinite period of time. Accordingly, no deferred taxes have been provided for the differences between the Company’s book basis and underlying tax basis in those subsidiaries or on the foreign currency translation adjustment amounts.

Advertising Costs

Advertising CostsAdvertising costs are expensed as incurred and totaled $2.6 million, $4.2 million and $4.2 million during the years ended December 31, 2020, 2019, and 2018, respectively, and are reported in the Selling, general, and administrative expenses line in the accompanying Consolidated Statements of Operations.

Working Capital Deficit

Working Capital DeficitThe Company’s surcharge and interchange revenues are typically collected in cash on a daily basis or within a short period of time subsequent to the end of each month. However, the Company typically pays its vendors on 30 day terms and is not required to pay certain merchants until 20 days after the end of each calendar month. As a result, the Company will typically utilize the excess available cash flow to reduce outstanding borrowings and to fund investments and capital expenditures. Accordingly, it is not uncommon for the Company’s balance sheets to reflect a working capital deficit position. The Company considers such a presentation to be a normal part of its ongoing operations.

Contingencies

ContingenciesThe Company evaluates its accounting and disclosures for contingencies on a recurring basis in accordance with U.S. GAAP. An estimated loss from a loss contingency is accrued when it is both probable of occurring and the amount can be reasonably estimated. A contingency that might result in a gain is generally not reflected in the financial statements until realized. For additional information on contingencies, see Note 19. Commitments and Contingencies.

Acquisitions of Third Parties

The Company generally recognizes assets acquired and liabilities assumed in business combinations, including contingent liabilities, based on fair value estimates as of the date of acquisition.

In certain acquisitions, the Company agrees to pay additional amounts to sellers contingent upon achievement by the acquired businesses of certain negotiated goals, such as agreed-upon earnings targets. For the acquisition of Spark ATM Systems Pty Ltd. ("Spark") completed in 2017, the Company recognized liabilities for these contingent obligations based on their estimated fair value at the date of acquisition with any differences between the acquisition-date fair value and the ultimate settlement of the obligations being recognized as an adjustment to Other income, net on the Consolidated Statements of Operations. For additional information related to the Company’s acquisition related contingent consideration and fair value estimates, see Note 18. Fair Value Measurements and Note 19. Commitments and Contingencies.

There were no acquisitions of third parties during the year ending December 31, 2020. In May 2019, the Company paid $9.1 million to acquire ATM processing contracts associated with approximately 62,000 ATMs. For the year ended December 31, 2018, costs included in the Acquisition related expenses line on the Consolidated Statements of Operations included acquisition and integration related professional fees, employee severance, and lease termination costs related to certain operations of DirectCash Payments, Inc., which was acquired in January 2017.

New Accounting Pronouncements

Adoption of New Accounting Pronouncements

Current Expected Credit Losses. On January 1, 2020, the Company adopted Accounting Standards Update ("ASU") 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and related amendments (collectively, "Topic 326"), via a cumulative-effect adjustment to opening retained earnings. Topic 326 replaced the incurred loss impairment model under which credit losses were recognized when probable. The new guidance requires recognition of credit losses when expected based on a broad range of information, including historical experience and current economic conditions. To implement the standard, the Company applied an aging based methodology using historic loss experience and aging categories. Where necessary, the Company segregated receivables into pools with common characteristics. In addition, where appropriate and where the available information indicated that losses would be minimal, an estimated loss rate was applied. In all cases, losses are recognized when expected. The Company holds no material financing receivables and no other financial instruments measured at amortized cost. The Company's adoption of Topic 326 had the following impact on the Company’s consolidated financial statements:


	December 31, 2019		Topic 326 Adoption		January 1, 2020
	As Reported				As Adjusted
	(In thousands)

Accounts and notes receivable	$	101,046	$	—	$	101,046
Allowance for credit losses	(5,251)		(2,337)		(7,588)
Accounts and notes receivable, net	$	95,795	$	(2,337)	$	93,458

Deferred tax asset, net	$	13,159	$	466	$	13,625
Retained earnings	$	125,763	$	(1,871)	$	123,892

Fair Value Measurement. In January 2020, the Company adopted ASU 2018-13, Disclosure Framework (Topic 820): Changes to the Disclosure Requirements for Fair Value Measurement. This guidance modified the disclosure requirements for fair value measurements. The Company's adoption of these disclosure requirements had no impact on the Company's consolidated financial statements.

In March 2020, the Financial Accounting Standards Board ("FASB") issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions to the current guidance on contract modifications and hedging relationships to ease the financial reporting burdens of the expected market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate ("SOFR"). The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The adoption of this guidance has had no impact on the consolidated financial statements as the Company has not yet modified any of the existing contracts in response to the reference rate reform. The impact of this ASU will ultimately depend on the terms of any future contract modification related to a change in reference rate, including potential future modifications to the Company's debt facilities, vault cash agreements and cash flow hedges.

On March 2, 2020, the SEC finalized Release No. 33-10762 which made significant changes to its disclosure requirements relating to registered securities that are guaranteed. The disclosure requirements, as amended, are generally effective for filings on or after January 4, 2021, with early adoption permitted. In October 2020, the FASB issued ASU 2020-09, Debt (Topic 470): Amendments to SEC Paragraphs Pursuant to SEC Release No. 33-10762, to amend and supersede various SEC paragraphs to reflect the disclosure changes in the SEC release. The new rules, adopted early by the Company in conjunction with its Form 10-Q for the period ended March 31, 2020, changed the form and content of the guarantor financial information disclosures, requiring summarized financial information only as of and for the most recently completed fiscal year and subsequent year-to-date interim period, if certain conditions are met.

Accounting Pronouncements Issued But Not Yet Adopted

In October 2020, FASB issued ASU 2020-10, Codification Improvements, which clarifies application of guidance to a wide variety of topics in the Accounting Standard Codification. The guidance also includes amendments to improve the codification by ensuring that all guidance that requires or provides an option for an entity to disclose information in the notes to the financial statements is codified in the disclosure section of the respective codification and to clarify guidance so that entities can apply guidance more consistently where the original guidance may have been unclear. The ASU is effective for fiscal years beginning after December 15, 2020 with early adoption permitted. The Company is currently evaluating the impact of this clarified guidance on the Company’s consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The ASU simplifies the accounting for income taxes by removing certain exceptions for recognizing deferred taxes, performing intra-period allocations and calculating income taxes in interim periods. The ASU also adds guidance intended to reduce complexity in certain areas, including recognizing deferred taxes for certain changes in the tax basis of goodwill and allocating taxes to members of a consolidated group. The ASU is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted including adoption in an interm period. The Company is currently evaluating the impact of this new guidance on the Company’s consolidated financial statements.

Although there are several other new accounting pronouncements issued by the FASB, the Company does not believe any of these accounting pronouncements had or will have a material impact on its consolidated financial statements.