Equity in Net Assets of Non-Consolidated Investee

9 Months Ended

Sep. 26, 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. We account for our interest in the investee’s reported net income or loss under the equity method of accounting and present these results in other expense (income), 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 September 26, 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 was no remaining carrying value of the convertible promissory note as of September 26, 2020. Interest income associated with the note was immaterial for the three and nine months ended September 26, 2020 and September 28, 2019. In April 2020, the Company converted the promissory note to an equity investment. The equity investment has a carrying value of zero as of September 26, 2020.