Accounting Pronouncements

12 Months Ended

Dec. 31, 2019

Accounting Changes and Error Corrections [Abstract]

Accounting Pronouncements

Accounting Pronouncements

The Company considers the applicability and impact of all ASUs issued by the FASB.

The Company considered the ASUs summarized below, effective for 2019:

Leases

In February 2016, the Financial Accounting Standards Board issued ASU 2016-02, "Leases," which requires lessees to record right-of-use assets and related lease obligations on the balance sheet, as well as disclose key information regarding leasing arrangements. On January 1, 2019, the Company adopted the standard by applying the modified retrospective method without the restatement of comparative financial information, as permitted by the transition guidance (Note 7, "Leases").

Tax Effects from Accumulated Other Comprehensive Income

Effective January 1, 2019, ASU 2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income" allows for the reclassification of "stranded" tax effects as a result of the Tax Cuts and Jobs Act from accumulated other comprehensive income to retained earnings. The Company elected not to reclassify such amounts. The Company reclassifies taxes from accumulated other comprehensive loss to earnings as the items to which the tax effects relate are similarly reclassified.

The Company considered the ASUs summarized below, effective after 2019:

Measurement of Credit Losses on Financial Instruments

Effective January 1, 2020, the standard changes the impairment model for most financial instruments to a current expected credit loss model. The guidance applies to all financial assets such as loans, accounts receivable (including long-term receivables), contract assets, net investments in sales-type and direct financing leases, held-to-maturity securities and certain financial guarantees. The new model will generally result in earlier recognition of credit losses.

The Company has drafted its accounting policy with respect to the standard and continues to assess all potential impacts of the guidance; however, the Company does not expect the adoption to have a significant impact on its consolidated financial position, results of operations or cash flows. As required by the standard, the Company expects to make additional disclosures related to the nature of the change in accounting principle, the method of applying the change, the cumulative effect of adoption and the amount of its credit losses. The Company plans to adopt the standard effective January 1, 2020. The Company will continue to evaluate the effect of the standard on its ongoing financial reporting.

Simplifying the Test for Goodwill Impairment

Effective January 1, 2020, the standard simplifies the accounting for goodwill impairments and allows a goodwill impairment charge to be based on the amount of a reporting unit's carrying value in excess of its fair value. This eliminates the requirement to calculate the implied fair value of goodwill (i.e., "Step 2" under current guidance).