Tucows 2015 Annual Report Download - page 190

In September 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740) (“ASU 2015-17”), which
relates to the balance sheet classification of deferred taxes to simplify the presentation of deferred income taxes. The
new standard requires that deferred tax liabilities and assets be classified as noncurrent in a classified balance sheet. The
guidance is effective for annual and interim reporting periods beginning after December 15, 2016 (January 1, 2017 for
the Company). Earlier adoption is permitted as of the beginning of an interim or annual reporting period. Companies can
transition to the standard either prospectively to all deferred tax liabilities and assets or retrospectively to all periods
presented. The Company is in the process of evaluating the impact that the adoption of ASU 2015-17 will have on its
consolidated financial statements and the selected method of transition to the new standard.
In September 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805) ("ASU 2015-16"),
which relates to the simplification of the accounting for measurement-period adjustments in business combinations. This
standard update eliminates the requirement to account for measurement-period adjustments retrospectively and requires
that an acquirer record the effects on earnings of any changes resulting from the change in provisional amounts,
calculated as if the accounting had been completed at the acquisition date in the reporting period in which the
adjustments are determined. We will adopt this update during the first quarter of 2016. The adoption of this update is not
expected to have a significant impact on our consolidated financial statements.
In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory (Topic 330)
(“ASU 2015-11”). The amendments in ASU 2015-11 require that inventory should be measured at the lower of cost and
net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less
reasonably predictable cost of completion, disposal and transportation. This guidance is effective for annual and interim
reporting periods of public entities beginning after December 15, 2016 (January 1, 2017 for the Company). Early
adoption of the standard is permitted as of the beginning of an interim or annual reporting period. The implementation of
the amendments in ASU 2015-11 are to be made on a prospective basis after the date of adoption. The Company is
currently in the process of evaluating the impact that the adoption of ASU 2015-11 will have on its consolidated
financial statements.
In April 2015, the FASB issued ASU No. 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing
Arrangement ("ASU 2015-05"), which provides guidance in determining whether fees for purchasing cloud computing
services (or hosted software solutions) are considered internal-use software or should be considered a service contract.
The cloud computing agreement that includes a software license should be accounted for in the same manner as internal-
use software if the customer has the contractual right to take possession of the software during the hosting period
without significant penalty and it is feasible to either run the software on customer’s hardware or contract with another
vendor to host the software. Arrangements that don’t meet the requirements for internal-use software should be
accounted for as a service contract. ASU 2015-05 will be effective for interim and annual periods beginning after
December 15, 2015 (January 1, 2016 for the Company). We will adopt this update in the first quarter of 2016. The
adoption of this update is not expected to have a significant impact on our consolidated financial statements.
In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30) (“ASU
2015-03”). The amendments in ASU 2015-03 require that debt issuance costs related to a recognized debt liability be
presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt
discounts. This guidance is effective for annual and interim reporting periods of public entities beginning after
December 15, 2015 (January 1, 2016 for the Company). In August 2015, ASU No. 2015-15 relating to the presentation
and subsequent measurement of debt issuance costs associated with line-of-credit arrangements was issued. This
standard adds SEC paragraphs pursuant to an SEC Staff Announcement that the SEC staff would not object to an entity
deferring and presenting debt issuance costs associated with a line-of-credit arrangement as an asset and subsequently
amortizing the costs ratably over the term of the arrangement. We will adopt these updates in the first quarter of 2016.
We do not expect the adoption of ASU 2015-03 and or ASU 2015-15 to materially impact our consolidated financial
statements.
In August 2014, the FASB issued ASU No 2014-15, Disclosure of Uncertainties about an Entity's Ability to
Continue as a Going Concern (Subtopic 205-40) (“ASU 2014-15”). ASU 2014-15 provides guidance on management's
responsibility in evaluating whether there is substantial doubt about a company's ability to continue as a going concern
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