New Accounting Pronouncements

12 Months Ended

Jun. 30, 2016

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

New Accountng Pronouncements

Accounting Pronouncements

Recently Issued Pronouncements

In May, 2014, the Financial Accounting Standards Board issued guidance revising the principles and standards for revenue recognition. The guidance creates a framework for recognizing revenue to improve comparability of revenue recognition practices across entities and industries focusing on when a customer obtains control of goods or services, rather than the current risks and rewards model of recognition. The core principle of the new standard is that an entity recognizes revenue when it transfers goods or services to its customers in an amount that reflects the consideration an entity expects to be entitled to for those goods or services. The new disclosure requirements include information intended to communicate the nature, amount, timing and any uncertainty of revenue and cash flows from applicable contracts, including any significant judgments. Entities will generally be required to make more estimates and use more judgment under the new standard. The guidance is effective for our quarterly report ending September 30, 2018 and we are evaluating the methods of adoption allowed by the new standard and the effect the standard is expected to have on our results of operations, financial position and cash flows.

In July, 2015, the Financial Accounting Standards Board issued guidance simplifying the measurement of inventory. The guidance requires inventory to be measured at the lower of cost and net realizable value. The guideline, effective for our quarter ending September 30, 2017, is not expected to have a material impact on our results of operations, financial position and cash flows.

In January, 2016, the Financial Accounting Standards Board issued guidance to improve the recognition, measurement, presentation and disclosure of financial instruments. The improvements include guidance on estimating fair value for financial instruments measured at amortized cost on the balance sheet, the classification of financial assets and liabilities on the balance sheet and reduced disclosure for the fair value of financial instruments recognized on the balance sheet at amortized cost. The guidance, effective for our quarter ending September 30, 2018, is not expected to have a material impact on our results of operations, financial position, cash flows and disclosures.

In February, 2016, the Financial Accounting Standards Board issued guidance revising the principles and standards for recognizing leases. The guidance requires lessees to recognize on the statement of financial position a liability for the lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. The recognition and measurement of lease expenses have not significantly changed from previous guidance. The guidance is effective for our quarter ending September 30, 2018 and we are evaluating the impact the guidance is expected to have on our results of operations, financial position and cash flows.

In March, 2016, the Financial Accounting Standards Board issued guidance simplifying the accounting and disclosure requirements for share-based compensation, including the income tax consequences, classification of the awards as equity or liability and classification on the statement of cash flows. The guidance, effective for our quarter ending September 30, 2017, is not expected to have a material impact on our results of operations, financial position and cash flows.

Recently Adopted Pronouncements

In June, 2014, the Financial Accounting Standards Board issued guidance on share-based payments where performance targets can be achieved subsequent to the requisite service period. In such instances, the guidance requires the performance target to be excluded from the determination of the grant date fair value and, when it is probable the performance target will be met, recognition of compensation cost attributable to the periods which the requisite service has already been rendered. The guidance did not impact any share-based payment awards outstanding, thus the guidance is adopted prospectively for all share-based payment awards granted after June 30, 2016 and did not impact our results of operations, financial position and cash flows.

In April, 2015, the Financial Accounting Standards Board issued guidance on the presentation of debt issuance costs which requires the debt issuance costs to be recognized as a direct deduction from the carrying amount of the debt liability as debt issuance costs do not represent assets, but rather adjustments to the carrying cost of debt. We adopted the guidance retrospectively to June 30, 2015. The implementation of this guidance resulted in a $77,000 and $84,000 reduction to long-term debt on the accompanying Consolidated Balance Sheets as of June 30, 2016 and 2015, respectively, representing amounts previously reported as unamortized debt expense. The adoption of the guidance did not have a material effect on our results of operations, financial position and cash flows.

In May, 2015, the Financial Accounting Standards Board issued guidance simplifying the disclosure of certain investments measured using the net asset value per share of the investment. The guidance provides for a practical expedient where investments measured at net asset value per share should not be categorized within the fair value hierarchy (i.e., as Level 1, 2 or 3). Adoption of the guidance did not impact our results of operations, financial position and cash flows.

In November, 2015, the Financial Accounting Standards Board issued guidance to simplify the presentation of deferred income taxes on the balance sheet by classifying all deferred tax assets and liabilities as non-current. As a result of the standard, we have presented all deferred tax liabilities and assets, net, as non-current in deferred income taxes on the accompanying Consolidated Balance Sheets, retrospectively for all periods presented. The adoption of this standard resulted in a $442,000 and $141,000 reclassification of current deferred income tax liability to long-term deferred income tax liability for 2016 and 2015, respectively. Note 5 of the Notes to Consolidated Financial Statements further discusses our income taxes.