Annual report pursuant to Section 13 and 15(d)

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements
12 Months Ended
Jun. 30, 2019
Recently Issued Accounting Pronouncements  
Recently Issued Accounting Pronouncements

4.    Recently Issued Accounting Pronouncements

Effective July 1, 2019, the Company will adopt ASU 2016-02, "Leases (Topic 842)" ("ASU 2016-02") and other associated standards which supersedes existing guidance on accounting for leases in "Leases (Topic 840)." The new guidance requires a modified retrospective adoption. As such, the Company will recognize right-of-use assets equal to the carrying amounts of the leased assets under Topic 840 and a lease liability measured at the carrying amount of the capital lease obligation under Topic 840. As a result, the adoption of ASU 2016-02 will not have a material effect on the consolidated financial statements of the Company other than for the enhanced disclosures required under Topic 842.

Effective July 1, 2017, the Company adopted ASU 2016‑09, "Improvements to Employee Share-Based Payment Accounting" ("ASU 2016‑09"). ASU 2016‑09 affects entities that issue share-based payment awards to their employees. ASU 2016‑09 is designed to simplify several aspects of accounting for share-based payment award transactions which include the income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows and forfeiture rate calculations. The Company will continue to estimate forfeitures at each reporting period, rather than electing an accounting policy change to record the impact of such forfeitures as they occur. The adoption of ASU 2016‑09 did not have a significant impact on the Company’s consolidated financial statements.

Effective July 1, 2018, the Company adopted ASU 2016‑15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments" ("ASU 2016‑15"). ASU 2016‑15 made eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. The new standard requires adoption on a retrospective basis unless it is impracticable to apply, in which case it would be required to apply the amendments prospectively as of the earliest date practicable. The adoption of ASU 2016‑15 did not have a significant impact on the Company's consolidated financial statements.

Effective July 1, 2018, the Company adopted ASU 2016‑16, "Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory" ("ASU 2016‑16") with the objective to improve the accounting for the income tax consequences of intra-entity transfers of assets other than inventory. The new standard requires entities to recognize the income tax consequences of an intra-entity transfer of non-inventory asset when the transfer occurs. The adoption of ASU 2016-16 did not have a significant impact on the Company's consolidated financial statements.

Effective July 1, 2017, the Company adopted ASU 2016‑17, "Consolidation (Topic 810): Interests Held Through Related Parties That Are Under Common Control" ("ASU 2016‑17"). ASU 2016‑17 amends the guidance issued with ASU 2015‑02 in order to make it less likely that a single decision maker would individually meet the characteristics to be the primary beneficiary of a Variable Interest Entity ("VIE"). When a decision maker or service provider considers indirect interests held through related parties under common control, they perform two steps. The second step was amended with this guidance to say that the decision maker should consider interests held by these related parties on a proportionate basis when determining the primary beneficiary of the VIE rather than in their entirety as was called for in the previous guidance. The adoption of ASU 2016‑17 did not have a significant impact on the Company’s consolidated financial statements.

Effective July 1, 2018, the Company adopted ASU 2017‑01, "Business Combinations (Topic 805): Clarifying the Definition of a Business" ("ASU 2017‑01"). ASU 2017‑01 clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The adoption of ASU 2017-01 did not have a significant impact on the Company's consolidated financial statements.

Effective July 1, 2018, the Company adopted ASU 2017‑09, "Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting" (“ASU 2017‑09") which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The adoption of ASU 2017-09 did not have a significant impact on the Company's consolidated financial statements.

Effective April 1, 2018, the Company adopted ASU No. 2017‑11, “Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815)" (“ASU 2017‑11”). The amendments in Part I of ASU 2017‑11 change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (“EPS”) in accordance with ASC 260 to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down round features are now subject to the specialized guidance for contingent beneficial conversion features (in ASC 470‑20, “Debt—Debt with Conversion and Other Options”), including related EPS guidance (in ASC 260). The amendments in Part II of this Update recharacterize the indefinite deferral of certain provisions of ASC 480 that now are presented as pending content in the codification, to a scope exception. Those amendments do not have an accounting effect. As a result of the adoption of ASU 2017‑11, the Company classified the proceeds received from the sale of its preferred stock as equity (see Note 11).

In June 2018, the FASB issued ASU No. 2018‑07, “Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting” (“ASU 2018‑07”). ASU No 2018‑07 expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The guidance also specifies that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years (quarter ending September 30, 2019 for the Company). The Company will evaluate the effects of adopting ASU 2018‑07 if and when it is deemed to be applicable.

Management does not believe that any other recently issued, but not yet effective, accounting standard if currently adopted would have a material effect on the accompanying consolidated financial statements. Most of the newer standards issued represent technical corrections to the accounting literature or application to specific industries which have no effect on the Company’s consolidated financial statements.