Accounting Changes and Error Corrections

9 Months Ended

Sep. 30, 2016

Accounting Changes and Error Corrections:

New Accounting Pronouncements and Changes in Accounting Principles

NEW ACCOUNTING PRONOUNCEMENTS

In May 2014, as part of its ongoing efforts to assist in the convergence of U.S. GAAP and International Financial Reporting Standards, the Financial Accounting Standards Board (FASB) issued a new standard related to revenue recognition. Under the new standard, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The new standard will be effective for us beginning January 1, 2018.  Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016. We anticipate this standard may have a material impact on our consolidated financial statements, and we are currently evaluating its impact.

In August 2014, FASB issued Preparation of Financial Statements - Going Concern, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern. Under GAAP, continuation of a reporting entity as a going concern is presumed as the basis for preparing financial statements unless and until the entity's liquidation becomes imminent. Preparation of financial statements under this presumption is commonly referred to as the going concern basis of accounting. If and when an entity's liquidation becomes imminent, financial statements should be prepared under the liquidation basis of accounting in accordance with Presentation of Financial Statements — Liquidation Basis of Accounting.  Even when an entity's liquidation is not imminent, there may be conditions or events that raise substantial doubt about the entity's ability to continue as a going concern. In those situations, financial statements should continue to be prepared under the going concern basis of accounting, but the amendments in this update should be followed to determine whether to disclose information about the relevant conditions and events. The amendments in this update are effective for us on January 1, 2017.   Early application is permitted. We anticipate this update will not have a material impact on our consolidated financial statements.

In November 2015, the FASB issued Income Taxes: Balance Sheet Classification of Deferred Taxes, which simplifies the presentation of deferred income taxes by requiring deferred tax assets and liabilities be classified as noncurrent on the balance sheet. The updated standard is effective for us beginning on January 1, 2017 with early application permitted as of the beginning of any interim or annual reporting period. We anticipate that this standard will not have a material impact on our consolidated financial statements.

In February 2016, the FASB completed its leases project by issuing Accounting Standards Update No. 2016-02, Leases. The updated guidance establishes the principles to report transparent and economically neutral information about the assets and liabilities that arise from leases.  The updated guidance:

• Results in a more faithful representation of the rights and obligations arising from leases by requiring lessees to recognize the lease assets and lease liabilities that arise from leases in the statement of financial position and to disclose qualitative and quantitative information about lease transactions, such as information about variable lease payments and options to renew and terminate leases,

• Improves understanding and comparability of lessees' financial commitments regardless of the manner they choose to finance the assets used in their businesses,

• Clarifies the definition of a lease to address practice issues that were raised about the previous definition of a lease and to align the concept of control, as it is used in the definition of a lease, more closely with the control principle in consolidation.

The updated guidance is effective for us beginning January 1, 2019.  Early adoption of the update is permitted. The Company is evaluating the impact of this updated guidance on its consolidated financial statements and related disclosures.