Nautilus 2015 Annual Report Download - page 44
Download and view the complete annual report
Please find page 44 of the 2015 Nautilus 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.Gains and losses arising from foreign currency transactions, including transactions between us and our non-U.S. subsidiaries, are recorded as a component of other
income (expense) in our consolidated statements of operations.
Fair Value of Financial Instruments
The carrying values of cash and cash equivalents, trade receivables, prepaids and other current assets, trade payables and accrued liabilities approximate fair value
due to their short maturities.
For additional information on financial instruments recorded at fair value on a recurring basis as of December 31, 2015 and 2014 , refer to Note 4, Fair Value
Measurements .
Stock-Based Compensation
We recognize stock-based compensation expense on a straight-line basis over the applicable vesting period, based on the grant-date fair value of the award. To the
extent a stock-based award is subject to performance conditions, the amount of expense recorded in a given period, if any, reflects our assessment of the probability
of achieving the performance targets.
Fair value of stock options is estimated using the Black-Scholes-Merton option valuation model; fair value of performance share unit ("PSU") awards, restricted
stock unit ("RSU") awards and restricted stock awards ("RSA") is based on the closing market price on the day preceding the grant.
We estimate future forfeitures, at the time of grant and in subsequent periods, based on historical turnover rates, previous forfeiture experience and changes in the
business or key personnel that would suggest future forfeitures may differ from historical data. We recognize compensation expense for only those stock options
and other stock-based awards that are expected to vest. We reevaluate estimated forfeitures monthly and, if applicable, recognize a cumulative effect adjustment in
the period of the change if the revised estimate of the impact of forfeitures differs significantly from the previous estimate.
Income Per Share Amounts
Basic income per share amounts were computed using the weighted average number of common shares outstanding. Diluted income per share amounts were
calculated using the number of basic weighted average shares outstanding increased by dilutive potential common shares related to stock-based awards, as
determined by the treasury stock method.
New Accounting Pronouncements
ASU 2016-02
In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-02, "Leases (Topic 842)." ASU 2016-
02 replaces the existing guidance in Accounting Standards Codification ("ASC") 840, Leases. The new standards would require companies and other organizations
to include lease obligations on their balance sheets, including a dual approach for lessee accounting under which a lessee would account for leases as finance leases
or operating leases. Both finance leases and operating leases will result in the lessee recognizing a right-of-use ("ROU") asset and a corresponding lease liability.
For finance leases the lessee would recognize interest expense and amortization of the ROU asset, and for operating leases the lessee would recognize a straight-
line total lease expense. ASU 2016-02 is effective for public companies' annual periods, and interim periods within those fiscal years, beginning after December
15, 2018. We are currently evaluating any potential impact that adoption of ASU 2016-02 may have on our financial position, results of operations and cash flows.
ASU 2015-17
In November 2015, the FASB issued ASU 2015-17, "Income Taxes (Topic 740) - Balance Sheet Classification of Deferred Taxes." ASU 2015-17 simplifies the
presentation of deferred income taxes, and requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position.
The amendments apply to all entities that present a classified statement of financial position, and aligns the presentation of deferred income tax assets and liabilities
with International Financial Reporting Standards ("IFRS") IAS 1. ASU 2015-17 is effective for public companies' financial statements issued for annual periods
beginning after December 15, 2016, and interim periods within those annual periods. Early application is permitted and may be applied either prospectively to all
deferred tax liabilities and assets or retrospectively to all periods presented. We do not expect the adoption of ASU 2015-17 to have a material effect on our
financial position, results of operations or cash flows.
ASU 2015-11
In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory (Topic 330).” ASU 2015-11 simplifies the accounting for the valuation
of all inventory not accounted for using the last-in, first-out (“LIFO”) method by prescribing inventory be valued at the lower of cost and net realizable value. ASU
2015-11 is effective for public companies' annual periods, including interim periods within those fiscal years, beginning after December 15, 2016 on a prospective
basis. Early adoption is
40