CompUSA 2015 Annual Report Download - page 58
Download and view the complete annual report
Please find page 58 of the 2015 CompUSA annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Table of Contents
Recent Accounting Pronouncements
Public companies in the United States are subject tothe accounting and reporting requirements of various authorities, including the Financial Accounting
StandardsBoard(“FASB”)andtheSecuritiesandExchangeCommission(“SEC”).Theseauthoritiesissuenumerouspronouncements,mostofwhicharenot
applicabletotheCompany’scurrentorreasonablyforeseeableoperatingstructure.Belowarethenewauthoritativepronouncementsthatmanagementbelieves
arerelevanttoCompany’scurrentoperations.
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with
Customers (Topic 606), to achieve a consistent application of revenue recognition within the U.S., resulting in a single revenue model to be applied by
reportingcompaniesunderGAAP.Underthenewmodel,recognitionofrevenueoccurswhenacustomerobtainscontrolofpromisedgoodsorservicesinan
amountthatreflects the consideration towhich the entityexpects tobe entitledinexchangeforthose goods or services. In addition, therevisedguidance
requiresthatreportingcompaniesdisclosethenature,amount,timing,anduncertaintyofrevenueandcashflowsarisingfromcontractswithcustomers.The
revisedguidanceiseffectivefortheCompanybeginninginthequarterendingMarch31,2018;earlyadoptionisallowed.Therevisedguidanceisrequiredto
beappliedretrospectivelytoeachpriorreportingperiodpresentedorretrospectivelywiththecumulativeeffectofinitiallyapplyingitrecognizedatthedateof
initialapplication.TheCompanyiscurrentlyevaluatingthetransitionmethodthatwillbeelectedandthepotentialeffecttherevisedguidancewillhaveonthe
Company’sconsolidatedfinancialstatements.
InSeptember2015,theFASBissuedASU2015-16,Business Combinations - Simplifying the Accounting for Measurement-Period Adjustments (Topic805).
ASU2015-16requiresthatanacquirerrecognizeadjustmentstoprovisionalamountsthatareidentifiedduringthemeasurementperiodinthereportingperiod
inwhich the adjustment amountsaredetermined.ASU2015-16is effective for interim andannualperiodsbeginningafterDecember15,2015, with early
adoption permitted, and is to be applied on a prospective basis. The Company is currently in the process of evaluating the impact of the adoption of this
standardontheCompany’sconsolidatedfinancialstatements.
InNovember2015,theFASBissuedASU2015-17,Income Taxes (Topic740):Balance Sheet Classification of Deferred Taxes .ASU2015-17simplifiesthe
presentation of deferred income taxes by eliminating the separate classification of deferred income tax liabilities and assets into current and noncurrent
amountsintheconsolidatedbalancesheet.Theamendmentsintheupdaterequirethatalldeferredtaxliabilitiesandassetsbeclassifiedasnoncurrentinthe
consolidatedbalancesheet.TheamendmentsinthisupdateareeffectiveforannualperiodsbeginningafterDecember15,2016,andinterimperiodstherein
andmaybeappliedeitherprospectivelyorretrospectivelytoallperiodspresented.Earlyadoptionispermitted.TheCompanyhasearlyadoptedthisstandard
in the fourth quarter of 2015 on a retrospective basis. Prior periods have been retrospectively adjusted. As a result of the adoption of ASU 2015-17, the
Companyreclassified$1.7millionofnetcurrentdeferredtaxassetsand$1.9millionofnoncurrentdeferredtaxliabilitiesinthe2014balancesheet.
InFebruary2016,theFASBissuedASU2016-02,Leases ,whichrequiresalessee,inmostleases,toinitiallyrecognizealeaseliabilityfortheobligationto
makeleasepaymentsandaright-of-useassetfortherighttousetheunderlyingassetfortheleaseterm.Theguidanceiseffectiveforfiscalyearsbeginning
after December 15, 2018, and interim periods within those years. Early adoption is permitted. The Company is evaluating the effect of adopting this
pronouncement.
2. DISPOSITION
InMarch2015theCompanyannouncedarestructuringofitsNATGbusinessandclosed31retailstoresandawarehouseduringthesecondquarteroffiscal
2015.TheCompanyassessedthedisposalgroupunderASU2014-08andconcludedtheclosureofthedisposalgrouptobea"strategicshift".However,this
strategic shift was not determined to be a "major" strategic shift based on the portion of our consolidated business that the disposal group represented.
Accordinglythisdisposalgroupisnotpresentedintheaccompanyingfinancialstatementsasdiscontinuedoperationsandremainsincontinuingoperationsfor
thetwelvemonthsendedDecember31,2015andpriorperiods.
OnNovember17,2015theCompanyandPCMenteredintoanassetpurchaseagreementunderwhichPCMacquiredcertainbusinesstobusinessassetsof
NATG,includingtheTigerDirectbrand,for$14millionincashandtheassumptionofcertainliabilities.Theproceedsfromthesalearerecordedinspecial
charges,netwithin NATG discontinued operations loss. PCMdidnotacquirecash,accountsreceivable,inventoryorassumetrade payables in connection
withthetransaction. ThistransactionclosedonDecember 1,2015andonthatdate,thepartiesenteredintoatransitionservicesagreementtofacilitate an
orderlytransitionofthepurchasedassetsandfortheprovisionofvariousITandbackofficesupportservices.TheCompanyannouncedthatafterthesaleand
certaintransitionservicesagreementswithPCMwerecompleted,theCompanywouldcompletelyexittheremainingNATGoperationsduringearly2016.
This exit plan included the closing of the three remaining retail stores and management operations, the closing of its NATG distribution center, and
implementingageneralworkforcereductionrepresentingamajorstrategicshift,and,asaresulttheB2BandEcommercebusinessandthethreeremaining
retailstoresinoperationatthetimeofthesalearepresentedasdiscontinuedoperations.
56