Newly Adopted Accounting Principles

12 Months Ended

Dec. 31, 2015

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Newly Adopted Accounting Pronouncements

2. Newly Adopted Accounting Pronouncements

Balance Sheet Classification of Deferred Taxes

In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. This guidance simplifies the presentation of deferred income taxes by requiring an entity to classify deferred tax liabilities and assets as noncurrent in the classified statement of financial position. The amendments in this update apply to all entities that present a classified statement of financial position and does not affect the current requirement that deferred tax liabilities and assets be offset and presented as a single amount. Early application of the amendments is permitted for all entities as of the beginning of an interim or annual reporting period.

Furthermore, the ASU allows entities to apply the guidance either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. If the entity applies the guidance prospectively, the entity should disclose in the first interim and first annual period of change, the nature of and reason for the change in accounting principle and a statement that the prior periods were not retrospectively adjusted. If an entity applies the guidance retrospectively, the entity should disclose in the first interim and first annual period of change the nature of and reason for the change in accounting principle and quantitative information about the effects of the accounting change on prior periods.

We have decided to early adopt the amendments of this ASU prospectively to all deferred tax liabilities and assets. We believe adopting these amendments early and prospectively is reasonable as the ASU gives the option for early adoption and allows for explicit transition guidance to adopt the standard prospectively. The change only affects the classification of our deferred tax liabilities and assets reported in 2015 on our Consolidated Balance Sheets. Deferred tax liabilities and assets reported as current in 2014 were not retrospectively adjusted.