Equity in Net Assets of Non-Consolidated Investee

3 Months Ended

Mar. 28, 2020

Equity Method Investments and Joint Ventures [Abstract]

Equity in Net Assets of Non-Consolidated Investee

Equity in Net Assets of Non-Consolidated Investee

The Company has an investment in a private start-up company whose principal business is licensing software to eyeglass retailers. Under the equity method of accounting, we are required to record our interest in the investee’s reported net income or loss for each reporting period, which is presented in other expense, net in the Company’s condensed consolidated statements of operations. After adjusting the carrying value of our interest in the investee’s reported net losses, there is no remaining equity investment balance associated with this investee as of March 28, 2020.

On August 29, 2017, the investee issued a secured convertible promissory note to the Company, in the principal amount of $1.5 million, due on August 29, 2020. Upon adoption of ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments in the first quarter of 2020, the Company increased the allowance for credit losses related to the convertible promissory note to $1.5 million. After adjusting for the estimated credit losses, there is no remaining carrying value of the convertible promissory note as of March 28, 2020. Interest income associated with the note was immaterial for the three months ended March 28, 2020 and March 30, 2019. In April 2020, subsequent to the date of the financial statements, the Company converted the promissory note to an equity investment.