Significant Accounting Policies

6 Months Ended

Jun. 27, 2020

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

1. Significant Accounting Policies

Basis of Presentation

These interim consolidated financial statements of SunOpta Inc. (the "Company" or "SunOpta") have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X promulgated under the Securities Exchange Act of 1934, as amended, and in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information.  Accordingly, these condensed interim consolidated financial statements do not include all of the disclosures required by U.S. GAAP for annual financial statements.  In the opinion of management, all adjustments considered necessary for fair presentation have been included and all such adjustments are of a normal, recurring nature.  Operating results for the quarter and two quarters ended June 27, 2020 are not necessarily indicative of the results that may be expected for the full fiscal year ending January 2, 2021 or for any other period.  The interim consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries, and have been prepared on a basis consistent with the annual consolidated financial statements for the year ended December 28, 2019.  For further information, refer to the consolidated financial statements, and notes thereto, included in the Company's Annual Report on Form 10-K for the fiscal year ended December 28, 2019.

As described in note 14, in the fourth quarter of 2019, the Company changed its segment reporting to reflect changes to its operating structure.  All segment information presented in these consolidated financial statements for the quarter and two quarters ended June 29, 2019 has been restated to reflect the new segment reporting structure.

Fiscal Year

The fiscal year of the Company consists of a 52- or 53-week period ending on the Saturday closest to December 31. Fiscal year 2020 is a 53-week period ending on January 2, 2021, with quarterly periods ending on March 28, June 27 and September 26, 2020. Fiscal year 2019 was a 52-week period ending on December 28, 2019, with quarterly periods ending on March 30, June 29 and September 28, 2019.

Recent Accounting Pronouncements

Effective the first quarter of 2020, the Company adopted Accounting Standards Update ("ASU") 2016-13, "Measurement of Credit Losses on Financial Instruments," which requires the immediate recognition of expected versus incurred credit losses for most financial assets.  The Company adopted ASU 2016-13 under the modified retrospective approach and applied the new guidance to its short-term accounts receivable.  The adoption of this new guidance did not result in the recognition of additional allowances for credit losses.  The Company closely monitors receivable balances and estimates the allowance for credit losses based on historical collection experience, and account aging analysis and trends.  The Company evaluates the adequacy of the allowance each reporting period, considering individual customer account reviews, write-offs recorded in the period, sales forecasts and trends, and current and expected economic conditions.