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Note 3 - Recent Accounting Pronouncements
 3 Months Ended
Dec. 31, 2019
Notes to Financial Statements  
New Accounting Pronouncements and Changes in Accounting Principles [Text Block]
3.
RECENT ACCOUNTING PRONOUNCEMENTS
 
New pronouncements pending adoption
 
In
June 2016,
the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)
No.
2016
-
13,
Measurement of Credit Losses on Financial Instruments
, which supersedes current guidance by requiring recognition of credit losses when it is probable that a loss has been incurred. The new standard requires the establishment of an allowance for estimated credit losses on financial assets including trade and other receivables at each reporting date. The new standard will result in earlier recognition of allowances for losses on trade and other receivables and other contractual rights to receive cash. In
November 2019,
the FASB issued ASU
No.
2019
-
10,
Financial Instruments – Credit Losses (Topic
326
), Derivatives and Hedging (Topic
815
) and Leases (Topic
842
)
, which extends the effective date of Topic
326
for certain companies until fiscal years beginning after
December 15, 2022.
The new standard will be effective for the Company in the
first
quarter of fiscal year beginning
October 1, 2023,
and early adoption is permitted. The Company is currently reviewing this standard to assess the impact on its consolidated financial statements and related disclosures.
 
In
February 2018,
the FASB issued ASU
No.
2018
-
02,
Income Statement—Reporting Comprehensive Income (Topic
220
)
. The amendments in this ASU allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. Consequently, the amendments eliminate the stranded tax effects resulting from the Tax Cuts and Jobs Act and will improve the usefulness of information reported to financial statement users. However, because the amendments only relate to the reclassification of the income tax effects of the Tax Cuts and Jobs Act, the underlying guidance that requires that the effect of a change in tax laws or rates be included in income from continuing operations is
not
affected. The amendments in this update also require certain disclosures about stranded tax effects. The guidance is effective for fiscal years beginning after
December 15, 2018
with early adoption permitted, including interim periods within that fiscal year. Accordingly, this is effective for the Company in the fiscal year beginning
October 1, 2019.
The Company expects that the adoption of this ASU will
not
have a material impact on its consolidated financial statements.
 
New pronouncements adopted
 
In
May 2014,
the FASB issued ASU
No.
2014
-
09,
Revenue from Contracts with Customers
(“ASU
2014
-
09”
), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU
2014
-
09
will replace most existing revenue recognition guidance in U.S. generally accepted accounting principles when it becomes effective. In
July 2015,
the FASB deferred the effective date of the standard by an additional year; however, it provided companies the option to adopt
one
year earlier, commensurate with the original effective date. Accordingly, the standard was effective for the Company in the fiscal year beginning
October 1, 2018.
Subsequently the FASB has issued additional guidance (ASUs
2015
-
14;
2016
-
08;
2016
-
10;
2016
-
12;
2016
-
13;
2016
-
20
). The adoption of this guidance by the Company, effective
October 1, 2018,
did
not
have a material impact on the Company’s consolidated financial statements (see Note
4,
Revenue Recognition, for further detail). ASU
No.
2014
-
09
and its amendments form Accounting Standards Codification Topic
606,
Revenue from Contracts with Customers
(“Topic
606”
).
 
In
February 2016,
the FASB issued ASU
No.
2016
-
02,
Leases (
“
Topic
842
”
)
, which issued new guidance related to leases that outlines a comprehensive lease accounting model and supersedes the current lease guidance. The new guidance requires lessees to recognize lease liabilities and corresponding right-of-use assets for all leases with lease terms of greater than
12
 months. Leases with a term of
12
months or less will be accounted for in a manner similar to the guidance for operating leases prior to the adoption of Topic
842.
Topic
842
requires entities to recognize and measure leases existing at, or entered into after, the beginning of the earliest comparative period presented using a modified retrospective approach, with certain practical expedients available. In
July 2018,
the FASB issued ASU
No.
2018
-
11
(“ASU
2018
-
11”
), which offers a practical expedient that allows entities the option to apply the provisions of Topic
842
by recognizing a cumulative effect adjustment at the effective date of adoption without adjusting the prior comparative periods presented. In
March 2019,
the FASB issued ASU
2019
-
01
(“ASU
2019
-
01”
), which explicitly provides disclosure relief for interim periods during the year the standard is adopted.
 
The new guidance was effective for the Company beginning
October 1, 2019.
The Company adopted Topic
842
by applying the modified retrospective transition approach. Under this method, financial information related to periods prior to adoption will be as originally reported under the then-current standard (Topic
840,
Leases). The Company elected the following practical expedients:
 
 
●
The transitional practical expedients, which must be elected as a package and applied consistently to all leases. In electing this practical expedient package the Company is
not
required to:
 
o
reassess whether an existing or expired contract is or contains a lease
 
o
reassess the lease classification for any expired or existing leases and
 
o
reassess initial direct lease costs for all leases that commenced before the adoption
 
●
Short-term lease practical expedient in which the Company can elect
not
to apply the recognition requirements of Topic
842
to short-term leases.
 
As a result of adopting Topic
842
effective
October 1, 2019,
the Company recorded an initial measurement of
$7,814,701
of operating lease liabilities and
$5,823,972
of corresponding operating Right of Use (“ROU”) assets, net of tenant improvement allowances and deferred rent, primarily related to the Company’s facility lease. There was
no
other impact from the adoption of Topic
842.
A portion of the existing leases are denominated in currencies other than the U.S. dollar. As a result, the associated lease liabilities will be remeasured using the current exchange rate in the applicable reporting periods, which
may
result in foreign exchange gains or losses. There was
no
cumulative effect adjustment to retained earnings as a result of the transition to Topic
842.
See Note
12,
Leases for further disclosures related to Topic
842.