3.Summary of Selected Significant Accounting Policies.

(a) Cash and Cash Equivalents - Cash and cash equivalents are comprised of cash on hand, current balances with foreign and domestic banks and similar institutions, and term deposits of three months or less with banks and similar institutions. The carrying amounts of cash at banks and on hand and term bank deposits approximate their fair values.

(b)Revenue Recognition - Casino revenue is defined as the net win from gaming activities, which is the difference between gaming wagers and the amount paid out to wagering patrons, and is recognized on the day it is earned. Revenues generated from other services, which include room rentals, sales of food, beverage, cigarettes, spa services, and casino logo merchandise, are recognized at the time the related services are performed or goods sold. Room revenue from the hotel and casino segments represented 5.2% and 4.6% of consolidated total revenue for the six months ended June 30, 2016 and 2015, respectively. Food and beverage (“F&B”) revenues from the hotel and casino segments represented approximately 3.7% and 2.6% of consolidated total revenue for the six months ended June 30, 2016 and 2015, respectively.

(c)Business Acquisitions  Assets acquired and liabilities assumed in business combinations are recorded on the Company’s consolidated balance sheets as of the respective acquisition dates based upon their estimated fair values at such dates. The results of operations of businesses acquired by the Company have been included in the consolidated statements of income since their respective dates of acquisition. In certain circumstances, the purchase price allocations may be based upon preliminary estimates and assumptions. Accordingly, the allocations are subject to revision until the Company receives final information and other analyses during the measurement period which ends a year after the date of acquisition.

(d)Segment Reporting – Pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 280, Segment Reporting, the Company has two reportable segments, a casino segment and a hotel segment. ASC 280 designates the internal reporting that is used by management for making operating decisions and assessing performance as the source of the Company’s reportable segments. The Company is including this segment reporting under Note 5 below.

(e)Earnings per Share - The Company complies with accounting and disclosure requirements regarding earnings per share. Basic earnings per common share are computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per common share incorporate the dilutive effect of Common Stock equivalents on an average basis during the period. The Company’s Common Stock equivalents currently include stock options, restricted stock, and deferred compensation stock. As of June 30, 2016, the Company’s Common Stock equivalents include 665,000 unexercised stock options, 75,000 shares of restricted stock, and 616,053 shares issuable under the Company’s Deferred Compensation Plan. As of June 30, 2015, the Common Stock equivalents included 645,100 unexercised stock options, 75,000 shares of restricted stock, and 428,870 deferred compensation shares. These shares for the respective years were included in the computation of diluted earnings per common share, if such unexercised stock options, restricted stock, and deferred compensation stock were vested and “in-the-money.”

The Company has not paid dividends on its Common Stock since inception and has no current plans to do so.

A table illustrating the impact of dilution on earnings per share, based on the treasury stock method, is presented below:



	For the Six Months Ended				For the Three Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Basic earnings per share:
Net income	$	2,614	$	1,233	$	1,608	$	710

Weighted average common shares		8,829,011		8,821,205		8,829,011		8,821,205

Basic earnings per share	$	0.30	$	0.14	$	0.18	$	0.08

Diluted earnings per share:
Net income	$	2,614	$	1,233	$	1,608	$	710

Weighted average common shares		8,829,011		8,821,205		8,829,011		8,821,205

Addition due to the effect of dilutive securities using the treasury stock method:
Stock options and restricted stock		4,797		729		8,645		425
Stock issuable under the Deferred Compensation Plan		616,053		428,870		616,053		428,870

Dilutive potential common shares		9,449,861		9,250,804		9,453,709		9,250,500

Diluted earnings per share	$	0.28	$	0.13	$	0.17	$	0.08

(f)Goodwill - Goodwill represents the excess of the cost of the Company’s subsidiaries over the fair value of their net assets at the date of acquisition. In Czechia, this consisted of the Ceska casino and a parcel of land in Hate (upon a portion of which the Route 59 Casino and Hotel Savannah are situated). In Germany, it consists of the newly acquired Hotel Freizeit Auefeld. Goodwill is subject to at least an annual assessment for impairment, applying a fair-value based test. Goodwill impairment tests require the Company to first assess qualitative factors, which include macroeconomic conditions, financial performance, and industry and market considerations, to determine whether it is necessary to perform a two-step quantitative goodwill impairment test. TWC assesses the potential impairment of goodwill annually (as of September 30th) and on an interim basis whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Upon completion of such review, if impairment is found to have occurred, a corresponding charge to earnings will be recorded. TWC allocates its Czech goodwill over two geographical reporting units, which are components of the casino segment, and are classified as the “Pilsen reporting unit” (“PRU”), which consists of the Ceska casino, and the “South Moravia reporting unit” (“SMRU”), which consists of the land in Hate. The German goodwill is derived from the Hotel Freizeit Auefeld, and is represented by the “Lower Saxony reporting unit” (“LSRU”). There were no indicators of impairment present during the second quarter of 2016 for the Czech reporting units, nor for the Hotel Freizeit Auefeld; therefore, TWC determined that there was no impairment of goodwill at June 30, 2016.

Changes to goodwill during the periods presented are strictly related to the fluctuation in foreign currency exchange rates. See Note 3(i) below.

(g)Property and Equipment - Property and equipment is stated at cost less accumulated depreciation and amortization. TWC capitalizes the cost of improvements that extend the life of the asset and expenses maintenance and repair costs as incurred. The Company provides for depreciation and amortization using the straight-line method over the following estimated useful lives:


Asset		Estimated Useful Life

Buildings		30-50 years
Furniture, fixtures and equipment		4-10 years
Leasehold improvements		5-20 years

At June 30, 2016 and December 31, 2015, property and equipment consisted of the following:


	As of		As of
	June 30, 2016		December 31, 2015
	(Unaudited)

Land	$	2,925	$	2,874
Building and improvements		35,645		34,950
Furniture, fixtures and other equipment		13,092		12,253

		51,662		50,077
Less accumulated depreciation and amortization		(14,041)		(12,955)

	$	37,621	$	37,122

(h)Impairment of Long-lived Assets - The Company periodically evaluates whether current facts or circumstances indicate that the carrying value of its depreciable assets to be held and used may be recoverable. If such circumstances are determined to exist, an estimate of undiscounted future cash flows produced by the long-lived assets, or the appropriate grouping of assets, is compared to the carrying value to determine whether an impairment exists. If an asset is determined to be impaired, the loss is measured based on the difference between the asset’s fair value and its carrying value. An estimate of the asset’s fair value is based on quoted market prices in active markets, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including a discounted value of estimated future cash flows. The Company reports an asset to be disposed of at the lower of its carrying value or its estimated net realizable market value. There were no indicators of impairment for long-lived assets for the six and three months ending June 30, 2016 and 2015.

(i)Foreign Currency Translation - The Company complies with requirements for reporting foreign currency translation, which require that for foreign subsidiaries whose functional currency is the local foreign currency, balance sheet accounts are translated at exchange rates in effect at the end of the period and resulting translation adjustments are included in “accumulated other comprehensive income (loss).” Statement of income accounts are translated by applying monthly averages of daily exchange rates on the respective monthly local statement of operations accounts for the period.

The impact of foreign currency translation on goodwill is presented below:


(Unaudited)	Goodwill
	Casino Segment						Hotel Segment			Total
	Pilsen			South-Moravia			Lower Saxony
As of June 30, 2016 (in thousands, except FX)	reporting unit			reporting unit			reporting unit

Balance in USD ($)	$	3,042	(1)	$	537	(1)	$	131		$	3,710
Balance in EUR (€)							€	119		€	119
Foreign Exchange Rate ("FX")		33.883			33.8830			27.2450
Balance in CZK (Kč)	Kč	103,072	(2)	Kč	18,195	(2)	Kč	3,242	(3)	Kč	124,509
Applicable FX(4)		24.433			24.4330			24.4330
Balance at June 30, 2016	$	4,219		$	745		$	132		$	5,096
Net cumulative change to goodwill due to foreign currency translation	$	1,177		$	208		$	1		$	1,386

(1)

Goodwill was amortized over 15 years until the Company started to comply with revised GAAP requirements, as of January 1, 2002. This balance represents the remaining, unamortized goodwill, after an impairment charge was taken prior to January 1, 2003.

(2)

USD residual balance translated to CZK at June 30, 1998, the date of acquisition of such assets, with the date of acquisition CZK to USD FX rate of 33.8830.

(3)

EUR balance translated to CZK at June 1, 2015, the date of acquisition of the Hotel Freizeit, with the date of acquisition CZK to EUR FX rate of 27.2450.

(4)

Czech central bank foreign exchange rates at June 30, 2016, taken from www.CNB.CZ.

(j)Stock-based Compensation - The Company accounts for stock options using the modified prospective method in accordance with accounting and disclosure requirements for stock compensation. Under this method, compensation costs include the estimated grant date fair value of the awards amortized over the options’ vesting period. The Company currently utilizes the Black-Scholes option pricing model to measure the fair value of stock options granted to certain key management employees (“KME”s). Stock-based compensation was approximately $42 and $15 for the three months ended June 30, 2016 and 2015, respectively, and $83 and $29 for the six months ended June 30, 2016 and 2015, respectively, and is included in selling, general and administrative expenses in the consolidated statements of income.

(k)Comprehensive Income (Loss) – The Company complies with requirements for reporting comprehensive income (loss). Those requirements establish rules for reporting and display of comprehensive income and loss and their components. Except for the Company’s change in the foreign currency translation adjustments to be included in other comprehensive income (loss), there were no other components of the Company’s comprehensive income (loss) in six and three months ended June 30, 2016 and 2015.

(l)Czech Gaming Taxes - The gaming taxes are summarized in the following table (all monetary figures in this footnote are in actual amounts, not in thousands) :


		2012 Gaming Tax Law
		(Effective from January 1, 2012 to December 31, 2015)
Live Games		20% gaming tax from revenue earned from live games (70% of tax allocated to the federal government; 30% of tax allocated to the local municipality).

Slots		20% gaming tax from revenue earned from slot games (20% of tax allocated to the federal government; 80% of tax allocated to the local municipality); and a per diem fixed fee of Kč 55 (approximately $2.25) per slot machine (allocated to the federal government).


		2016 Gaming Tax Amendment
		(Effective from January 1, 2016)
Live Games		23% gaming tax from revenue earned from live games (70% of tax allocated to the federal government; 30% of tax allocated to the local municipality).

Slots		28% gaming tax from revenue earned from slot games (20% of tax allocated to the federal government; 80% of tax allocated to the local municipality); and a per diem fixed fee of Kč 80 (approximately $3.30) per slot machine (allocated to the federal government).

Gaming taxes are to be paid quarterly, by the 25th day following the end of a quarter. TWC was current on all of its Czech gaming tax payments at June 30, 2016 and through the date of this report.

TWC’s gaming-related taxes and fees, which are recognized in the cost of revenues, for the six and three months ended June 30, 2016 and 2015 are summarized in the following table:


	(UNAUDITED)
(amounts in thousands)	For the Six Months Ended						For the Three Months Ended
	2016			2015			2016			2015

Gaming revenues (excluding ancillary revenues)	$	21,642		$	16,391		$	11,292		$	8,192

Gaming taxes and fees		5,953			3,426			3,098			1,717
Gaming taxes and fees as % of gaming revenues (above)		27.5	%		20.9	%		27.4	%		21.0	%

In conformity with the European Union (“EU”) taxation legislation, Czechia’s VAT has gradually increased from 5%, when that country joined the EU in 2004, to 21%, the effective rate since 2013. Unlike in other industries, VATs are not recoverable for gaming operations. The recoverable VAT under the Hotel Savannah, Hotel Columbus and Hotel Freizeit Auefeld was not material for the six and three months ended June 30, 2016 and 2015, respectively.

On June 7, 2016, the President of Czechia signed the 2017 Gambling Act (186/2016 Coll.) (the “Gambling Act”) and the 2017 Gambling Tax Act (187/2016 Coll.) (the “2017 Gambling Tax Act”) (collectively referred to as the “Gambling Acts”). The Gambling Acts became law on June 15, 2016, when they were published in the official Collection of Laws, maintained by the Czech Ministry of the Interior. The 2017 Gambling Tax Act, which is due to take effect on January 1, 2017, will raise the gaming tax rate on technical game (i.e. slot machine or electromechanical roulette or dice) revenues to a “minimum tax,”will raise the tax rate from 28% to 35%, and eliminate the per diem fixed fee of Kč 80 (approximately $3.30) on each slot machine. The 2017 Gambling Tax Act introduces a “minimum tax” on technical game which amounts to the product of the sum of all gambling positions of individual approved terminal devices (such as slot machines, electromechanical roulette and dice machines) and referred to in the permit for the location of the gambling premises and the amount of Kč 9,200 (approximately $380). Therefore, if the aggregate tax amount collected from the 35% gaming tax on technical game revenues is lower than the computed “minimum tax,” then the casino operator must pay the “minimum tax” and not the aggregate tax amount collected from the 35% gaming tax. Otherwise, if the aggregate tax amount collected from the 35% gaming tax on technical game revenues is greater than the computed “minimum tax,” then the casino operator need only pay the aggregate tax amount collected from the 35% gaming tax and not the “minimum tax.” The gaming tax rate on live game (i.e. cards, roulette or dice) revenues will remain unchanged at 23%. Further, the 2017 Gambling Tax Act modifies the tax revenue allocation between the federal government and local municipalities. A summary table of the 2017 Gambling Tax Act is shown below:


		2017 Gambling Tax Act
		(Effective from January 1, 2017)
Live Games		23% gaming tax from revenue earned from live games (70% of tax allocated to the federal government; 30% of tax allocated to the local municipality).

Slot and other technical games		The greater of either: (a) the aggregate amount collected from 35% gaming tax from revenue earned from slot and other technical games (35% of tax allocated to the federal government; 65% of tax allocated to the local municipality) or (b) a "minimum tax," calculated as the product of the sum of all gambling positions of individual approved terminal devices referred to in the permit for the location of the gambling premises times Kč 9,200 (approximately $380).

The 2017 Gambling Act introduces many new changes, requirements and conditions, that will take effect at various times in the future, some taking effect on the date of enactment, some on January 1, 2017 and certain provisions taking effect upon the renewal of the casino operator’s gambling licenses. Although TWC’s 10-year gambling license expires in September 2018, and its slot operating one-year license expires at the end of 2017, the Company has begun to take steps to conform to these requirements for when it applies for its slot and other technical game license by the end of 2017. The Company is also awaiting the Czech Ministry of Finance’s (“MOF”) final interpretation of these new measures, due in August 2016. The notable changes and requirements are as follow (all figures in the following section are in stated amounts, not in thousands):

Upon the effective date of the Gambling Act, any gambling operator may apply for a gambling license if it meets all of the following conditions, having: (i) an office in Czechia, in another European Union Member state or in a state that is a party to the Agreement on the European Economic Area; (ii) an organizational chart that sets clear and comprehensive definitions of jurisdictions and decision-making powers; (iii) an established board of directors or similar control body; (iv) equity of at least of €2,000,000 ($2.2 million); (v) a transparent and unobjectionable origin of its financial resources; and (vi) transparent ownership structure. During the licensing process, confirmation of corporate ownership of Czech entity and required documents (e.g. criminal and tax records, etc.) from all members of the board of directors and representative from all levels of the company structure must be furnished to the MOF.

A basic, general gambling license will be issued for a maximum of six (6) years and a gambling license for each location at which live game and technical game operations will be conducted (will be issued from local municipality councils) for a maximum of three (3) years. (Previously, the MOF general gambling licenses for live games have been issued for ten (10) years and for one (1) year for technical games). Licenses can be issued and/or renewed if the Company meets the following pre-existing conditions: (i) maintains a clean criminal record and all necessary certifications; (ii) pays its taxes on time; (iii) stays in good standing; and, (iv) confirms its ability to comply with all technical and supervisory standards required by the new law. TWC is in full compliance with these conditions.

Individual municipalities and their local councils will be entitled to issue decrees to prohibit or restrict gambling operations, to set permissible hours of gambling operations and designate locations of operations within their respective jurisdictions. Previously, municipalities, by decree, have been allowed to ban gambling operations or set the locations of gambling operations within their respective jurisdictions. Currently, TWC is in good standing with all of the municipalities in which it operates.

Gambling operations will not be permitted in certain premises such as schools, children’s leisure facilities, health and social care facilities, churches or religious societies. TWC’s existing casinos are in full compliance with this requirement.

Gambling operators will be required to follow certain self-restricting measures put in place by individual players. For instance, an operator must create an individual account for each player, which the player can use to manage his/her gaming expenditures and frequency of play, including a maximum number of casino visits per month. These accounts must also allow players to set individual limits on gambling activities, including setting maximum bets per day or per calendar month or a maximum amount of net loss per day or per calendar month. Each customer’s identity must be checked against the MOF’s central database of individuals excluded from the participation of gambling (black-listed). Some of these provisions will not become effective until one year after the MOF has set up their central database, but the self-restriction provisions will become effective immediately after new licenses are obtained. In order to meet these self-restricting measures, the Company will implement a new casino management system.

Gambling operators will also be required to bar from entry individuals flagged by the MOF and registered in its central database as black-listed or noted as being “destitute” and on public assistance, bankrupt, are subject to an order banning them from gambling under Czech criminal law or are a compulsive gambler. No one under age 18 will be allowed on the casino floor.

Gambling operators will not be able to provide for free any benefits to a player, including food, beverages, tobacco products or “stimulating substances.”

Gambling operators will be required to post a sign on each technical game warning that gambling is “harmful,” advising of the amount of the player’s net losses and how long the player has been playing, with a requirement that there be a 15 minute break every 2 hours.

All customer transactions, such as exchanging money for gambling chips, must be logged and such records be kept for 10 years, up from five years under the previous law. TWC will extend its record archiving to 10 years to comply with this requirement.

The required retention period of all required real time color audio/visual surveillance recordings will increase from three months to 24 months. The Company is currently evaluating new surveillance systems that will meet this requirement.

Maximum bets for technical games will be increased to Kč 1,000 (about $41) from the current amount of Kč 675 (about $28) and maximum win (or jackpot) per slot machine will be decreased to Kč 500,000 (approximately $20,500) from the current amount of Kč 675,000 (approximately $27,700). Slot and electromechanical machine vendors/suppliers will be required to incorporate these limit changes to all slots and technical games that they sell/service to the casinos.

Casinos must have a minimum of three live games tables and 30 technical games available during operating hours. For each live game table, a casino may operate an additional 10 slot or technical game machines. If a casino has more than 10 live game tables, there is no limit on number of slot or technical game machines permitted. All of TWC’s existing casinos have more than 10 live game tables in operation.

A gaming bond equal to Kč 10 million (approximately $410,000) will be required to be paid for a casino operator to the MOF for each casino units. For operators owning multiple casinos, a minimum bond of Kč 20 million (approximately $820,000) is required, up to a maximum of Kč 50 million ($2.0 million) for any licensee, regardless of the number of casinos owned and operated. Previously, only one gaming bond of Kč 22 million ($900,000) was required, which is used for the existing licenses. When TWC renews its gaming license, it will have to provide a new gaming bond of Kč 30 million ($1.2 million), to meet the new bond requirements for its three casinos, resulting in a net increase of Kč 8 million (approximately $330,000) from its existing bond. However, a casino operator cannot access the funds underlying the old bond until the expiration of one year after the termination of the old bond. Therefore, the casino operator must initially pledge additional funds to secure the new bond requirement, which for TWC, will amount to Kč 30 million ($1.2 million).

Failure to comply with the new Gambling Act could result in a misdemeanor punishable by fines up to Kc 1,000,000 (approximately $41,000) or an administrative offense punishable by an injunction against the violative practice, fines up to Kc 50,000,000 ($2.0 million) and/or asset forfeiture to, or confiscation by, the government.

The Company currently estimates that if the 2017 Gambling Tax Act were in effect for the full year ended December 31, 2016, it would have resulted in an annual reduction of approximately $1.3 million to the Company’s consolidated earnings before income taxes, assuming all other factors remained constant. The impact of the 2017 Gambling Act cannot be quantified or estimated pending the interpretation of these measures by the MOF and their eventual implementation into the Company’s gambling operations.

(m)Income Taxes — The Company complies with accounting and reporting requirements with respect to accounting for U.S. federal, state, local and foreign income taxes, which require an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and the tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred income tax assets to the amount expected to be realized. In accordance with GAAP, the Company is required to determine whether a tax position of the Company is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. De-recognition of a tax benefit previously recognized could result in the Company recording a tax liability that would reduce net assets. This guidance also provides directions on thresholds, measurement, de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition that is intended to provide better financial statement comparability among different entities. However, management’s conclusions regarding this guidance may be subject to review and adjustment at a later date based on factors including, but not limited to, on-going analyses of and changes to tax laws, regulations and interpretations thereof. The Company recognizes interest and penalties related to unrecognized tax benefits in interest expense and other expenses, respectively. No interest expense or penalties have been recognized as of and for the six and three months ended June 30, 2016 and 2015, respectively. The Company is subject to income tax examinations by major taxing authorities for all tax years since 2011.

The Company incurred an estimated foreign income tax expense of $1,316 and $652 for the six months ended June 30, 2016 and 2015, respectively. There were no income tax liabilities from the hotel segment, due to a net loss in that segment. TWC does not anticipate any U.S. income tax liability for 2016.

Czechia has an applicable corporate income tax of 19%, while Germany has an applicable corporate income tax rate of 30%. Estimated Czech corporate income tax payments are required to be paid quarterly. TWC was current on all of its tax reporting and payments at June 30, 2016 and through the date of this report.

(n)Recent Accounting Pronouncements  In May 2014, the FASB issued guidance on recognizing revenue from contracts with customers. The guidance clarifies the principles for recognizing revenue and establishes a common revenue standard for US GAAP and International Financial Reporting Standards. Early adoption is permitted, but not before the original effective date for public companies with annual reporting periods beginning after December 15, 2016. This guidance was deferred to after December 15, 2017 for public companies. Retrospective application is required. The Company is currently evaluating the impact of adopting this standard and does not expect the standard to have any material impact on its consolidated financial statements.

In June 2014, the FASB issued guidance on stock compensation that requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. The guidance is effective for reporting periods beginning after December 15, 2015, with early adoption permitted. The adoption of this guidance did not have a material impact on the Company’s existing stock-based compensation plans or its consolidated financial statements.

In August 2014, the FASB issued guidance on the presentation of financial statements for a going concern. This provides guidance on management’s responsibility to evaluate whether there is substantial doubt about a company’s ability to continue as a going concern and to provide related footnote disclosures. This guidance is effective for fiscal years ending after December 15, 2016, and annual and interim periods thereafter. The Company is reviewing the new standard for adoption and does not expect this standard to have a material impact on the Company’s consolidated financial statements.

In January 2015, the FASB issued an update on the treatment of extraordinary and unusual items. This update eliminates the concept of extraordinary items and the related income statement presentation of such items. The provisions of this guidance are effective for reporting periods beginning after December 15, 2015. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

In April 2015, the FASB issued an update on its guidance on the presentation of debt issuance costs. This update requires debt issuance costs to be presented as a direct deduction from the carrying amount of the related debt liability. The standard is effective for reporting periods beginning after December 15, 2015. Early adoption is permitted for financial statements that have not been previously issued. The update requires application of the updated guidance on a retrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying the new guidance. The debt issuance costs of the Company were not material as of June 30, 2016. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

In September 2015, the FASB issued updated guidance on business combinations. GAAP requires that during the measurement period, the acquirer retrospectively adjust the provisional amounts recognized at the acquisition date with a corresponding adjustment to goodwill. Those adjustments are required when new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts initially recognized or would have resulted in the recognition of additional assets or liabilities. The acquirer also must revise comparative information for prior periods presented in financial statements as needed, including revising depreciation, amortization, or other income effects as a result of changes made to provisional amounts. To simplify the accounting for adjustments made to provisional amounts recognized in a business combination, this update eliminates the requirement to retrospectively account for those adjustments. For public companies, the updated guidance is effective for financial statements issued for fiscal years beginning after December 15, 2015. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

In November 2015, the FASB issued updated guidance on income taxes. Current GAAP requires an entity to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified statement of financial position. To simplify the presentation of deferred income taxes, this update requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The current requirement that deferred tax liabilities and assets of a taxpaying component of an entity be offset and presented as a single amount is not affected by this update. For public companies, the updated guidance is effective for financial statements issued for annual periods beginning after December 15, 2016. The Company is currently evaluating the impact of adopting this guidance and does not expect the standard to have any material impact on its consolidated financial statements.

In February 2016, the FASB issued updated guidance to increase transparency and comparability among entities by reporting substantially all leased assets and related lease liabilities on the balance sheet and expanding disclosure of information about leasing arrangements. For public companies, the updated guidance is effective for financial statements issued for fiscal years beginning after December 15, 2018 (including interim periods within those fiscal years). Early adoption is permitted. The Company has not adopted this guidance for 2016 and is currently evaluating the impact of adopting it.

In March 2016, the FASB issued updated guidance on improvements to employee share-based payment accounting. It is intended to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. For public companies, the updated guidance is effective for annual periods beginning after December 15, 2016 (including interim periods within those annual years). Early adoption is permitted in any interim or annual period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. The Company has not adopted this guidance for 2016 and is currently evaluating the impact of adopting it.