Stein Mart 2015 Annual Report Download - page 36

STEIN MART, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in tables in thousands, except per share amounts)
F-12
In 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40). ASU No. 2014-15
requires management to perform interim and annual assessments on whether there are conditions or events that raise substantial doubt
about the entity's ability to continue as a going concern within one year of the date the financial statements are issued and to provide
related disclosures, if required. ASU No. 2014-15 applies to all entities and is effective for annual periods ending after December 15, 2016,
and interim periods within annual periods beginning after December 15, 2016. Early application is permitted for annual or interim reporting
periods for which the financial statements have not previously been issued. The adoption of ASU No. 2014-15 is not expected to have a
material effect on our consolidated financial statements.
In April 2015, the FASB issued ASU No. 2015-03, Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt
Issuance Costs. ASU No. 2015-03 states that entities that have historically presented debt issuance costs as an asset, related to a
recognized debt liability, will be required to present those costs as a direct deduction from the carrying amount of that debt liability. This
presentation will result in debt issuance cost being presented the same way debt discounts have historically been handled. ASU No. 2015-
03 does not change the recognition, measurement, or subsequent measurement guidance for debt issuance costs. This guidance is
effective for annual reporting periods beginning after December 15, 2016, and interim periods within annual reporting periods beginning
after December 15, 2016. Early adoption is permitted. We adopted this new guidance in 2016. This new guidance reduced total assets
and total long-term debt on our consolidated balance sheets by amounts classified as deferred debt issuance costs.
In April 2015, the FASB issued ASU No. 2015-05, Intangibles – Goodwill and Other – Internal Use Software (Subtopic 350-40). The
pronouncement was issued to provide guidance concerning accounting for fees in a cloud computing arrangement. The pronouncement is
effective for reporting periods beginning after December 15, 2015. The adoption of ASU 2015-05 is not expected to have a significant
impact on our consolidated financial statements.
In November 2015, the FASB issued ASU No. 2015-17, Income Taxes – Balance Sheet Classification of Deferred Taxes (Subtopic 740).
The pronouncement was issued to simplify the presentation of deferred income taxes by requiring 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
tax-paying component of an entity be offset and presented as a single amount is not affected by the amendments in this update. The
pronouncement is effective for reporting periods beginning after December 15, 2016. Early application is permitted as of the beginning of
an interim or annual period. We adopted ASU 2015-7 in the fourth quarter of 2015. The adoption of this ASU was applied retrospectively
to the periods presented in the Consolidated Financial Statements. As a result of the adoption, we reclassified approximately $3.1 million
of federal current deferred tax assets (in prepaid expenses and other current assets) to noncurrent deferred tax liabilities (in other
liabilities) in the 2014 Consolidated Balance Sheet, resulting in a net decrease in total assets and total liabilities. Additionally, we
reclassified the remaining $0.2 million of current state deferred tax assets to noncurrent assets. The retrospective adoption of this ASU is
also reflected in the deferred tax section of Note 6. The adoption of ASU 2015-17 is not expected to have any additional impact on our
consolidated financial statements.
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This update requires organizations to recognize lease assets and
lease liabilities on the balance sheet and also disclose key information about leasing arrangements. This ASU is effective for annual
reporting periods beginning on or after December 15, 2018, and interim periods within those annual periods. Earlier application is
permitted for all entities as of the beginning of an interim or annual period. We are currently evaluating the impact the adoption of this ASU
will have on our consolidated financial statements.
2. Property and Equipment, Net
Property and equipment, net consists of the following:
January 30, January 31,
2016 2015
Fixtures, equipment and software 233,124$ 215,662$
Leasehold improvements 120,782 99,766
353,906 315,428
Accumulated depreciation and amortization (190,952) (166,646)
Property and equipment, net 162,954$ 148,782$
During 2015, 2014 and 2013, we recorded asset impairment charges in SG&A of $2.0 million, $1.5 million and $2.2 million, respectively, to
reduce the carrying value of fixtures, equipment and leasehold improvements held for use and certain other assets in under-performing or
closing stores to their respective estimated fair value. The 2013 impairment charges also included write-off of certain information
technology assets that were replaced.