Adoption of New Accounting Standards
Effective January 1, 2020, the Company adopted Accounting Standards Update (ASU) 2018-
13, Fair Value Measurement (Topic 820), Disclosure Framework — Changes to the Disclosure
Requirements for Fair Value Measurement, which removes certain disclosure requirements
from FASB ASC 820 and modifies certain other disclosures. The Company has applied this
guidance retrospectively for certain disclosures and prospectively for other disclosures as
required by the standard. There was no prior year effect to the financial statements as a result
of this change.
New Accounting Standards to be Adopted in the Future
Leases
In February 2016, the FASB issued ASU 2016-02, Leases. The ASU requires ail leases with lease
terms more than 12 months to be capitalized as a right of use asset and lease liability on the
balance sheet at the date of lease commencement. Leases will be classified as either finance
leases or operating leases. This distinction will be relevant for the pattern of expense
recognition in the income statement. This ASU will be effective for the Company for the year
ending December 31, 2022. The Company is currently in the process of evaluating the impact
of adoption of this ASU on the financial statements.
Credit Losses
In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial
Instruments. The ASU requires a financial asset {including trade receivables) measured at
amortized cost basis to be presented at the net amount expected to be collected. Thus, the
income statement will reflect the measurement of credit losses for newly recognized financial
assets as well as the expected increases or decreases of expected credit losses that have
taken place during the period. This ASU will be effective for the Company for the year ending
December 31, 2023. The Company is currently in the process of evaluating the impact of
adoption of this ASU on the financial statements.
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