Annual report pursuant to Section 13 and 15(d)

Accounting Standards Update ("ASU")

v3.23.1
Accounting Standards Update ("ASU")
 12 Months Ended
Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Accounting Standards Update ("ASU") 3. Accounting Standards Updates (“ASU”)
Accounting Standards Recently Adopted
Effective January 1, 2022, the Company adopted ASC 842. The amendments in this update required the recognition of lease assets and lease liabilities on the balance sheet, as well as certain qualitative disclosures regarding leasing arrangements. The Company adopted ASC 842 using the modified retrospective method, with the cumulative effect of initially applying these updates recognized at the date of initial application. The adoption of this standard is reflected in the amounts and disclosures set forth in this Form 10-K. Upon adoption, the Company recognized operating lease ROU assets of $3.6 million, current operating lease liabilities of $530 thousand and long-term operating lease liabilities of $3.1 million, respectively in its consolidated balance sheets. There were no material impacts to the consolidated statements of operations and comprehensive loss or consolidated statements of cash flows.

Effective January 1, 2022, the Company adopted ASU No. 2019-12, Income Taxes (Topic 740): “Simplifying the Accounting for Income Taxes”. The amendments in this update are intended to simplify various aspects related to accounting for income taxes. This ASU removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This ASU was applied on a prospective basis. There were no material impacts to the consolidated financial statements upon adoption.
Accounting Standards Recently Issued But Not Yet Adopted
In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. The amendments in this update are primarily for entities holding financial assets and net investment leases measured under an incurred loss impairment methodology. A new methodology must be adopted to reflect expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates, which would include losses on trade accounts receivable. This ASU requires modified retrospective application. The guidance is effective for public business entities that are not smaller reporting companies for fiscal years beginning after December 15, 2019, including interim periods therein. For all other entities, the guidance is effective for fiscal years beginning after December 15, 2022, including interim periods therein. The Company will adopt this guidance as of January 1, 2023 and we do not expect this guidance will materially impact the Company.