assurance Accounting, Reporting and Auditing Developments April 7, 2017 Assurance Tax Advisory dhgllp.com

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1 ssurnce Q Accounting, Reporting nd Auditing Developments April 7, 2017 Assurnce Tx Advisory dhgllp.com

2 Accounting & Finncil Reporting Mtters...4 Finncil Accounting Stndrds Bord (FASB)...4 U.S. Securities & Exchnge Commission (SEC)...6 Assurnce Mtters...7 Americn Institute of CPAs (AICPA)...7 Center for Audit Qulity (CAQ)...7 Appendix A Effective Dte Highlights for Public Business Entities...8 Appendix B Effective Dte Highlights for Privte Compnies...19 Appendix C SEC Finl Rules Highlights...36 ssurnce 2 First Qurter 2017 Accounting, Reporting & Auditing Developments

3 first qurter 2017 ccounting & ssurnce updte The developments included in this Accounting nd Assurnce (A&A) Updte re intended to be reminder of recently issued ccounting nd uditing stndrds nd other guidnce tht my ffect our clients in the current reporting period. This qurterly A&A Updte is intended s generl informtion nd should not be relied upon s being definitive or llinclusive. Throughout the document we hve lso referenced other DHG A&A Updtes nd externl publictions, s pplicble. Recent qurterly A&A Updtes cn be found under Assurnce Alerts on the DHG Resource Center dhgllp.com 2017 by Dixon Hughes Goodmn LLP. All rights reserved. Permission is grnted to view, store, print, reproduce nd distribute ny pges of this Newsletter provided tht () no pge is modified nd (b) this pge is included with ny distribution. Disclimer: This publiction hs been prepred by the Dixon Hughes Goodmn LLP Professionl Stndrds Group nd contins informtion in summry form nd is therefore intended for generl guidnce only; it is not intended to be substitute for detiled reserch or the exercise of professionl judgment. You should consult with Dixon Hughes Goodmn LLP or other professionl dvisors fmilir with your prticulr fctul sitution for dvice concerning specific udit, tx or other mtters before mking ny decision. ssurnce 3 First Qurter 2017 Accounting, Reporting & Auditing Developments

4 Accounting & Finncil Reporting Mtters Finncil Accounting Stndrds Bord (FASB) The following re Accounting Stndrds Updtes (ASUs) recently issued by the FASB. For summry of their effective dtes, refer to Appendix A for public business entities nd Appendix B for privte compnies. ASU Receivbles Nonrefundble Fees nd Other Costs (Subtopic ), Premium Amortiztion on Purchsed Cllble Debt Securities views Generlly, cllble debt securities re quoted, priced nd trded using model tht incorportes the potentil for the debt security to be clled prior to its stted mturity dte (otherwise known s yield to worst pricing). As such, the mendments of ASU intend to provide more decision useful informtion by ligning the mortiztion period of premiums to the expecttions incorported in the mrket pricing of the underlying securities. ASU ws issued in response to diversity in prctice in the mortiztion period for premiums of cllble debt securities nd in how the potentil for exercise of cll is fctored into current impirment ssessments. As such, these mendments reduce the mortiztion period for certin cllble debt securities crried t premium nd require the premium to be mortized over the period not to exceed the erliest cll dte. These mendments do not pply to securities crried t discount. The mendments re effective for public business entities for nnul periods beginning fter December 15, 2018, including interim periods within those nnul periods. For other entities, the mendments re effective for nnul periods beginning fter December 15, 2019, nd interim periods within nnul periods beginning fter December 15, Erly doption is permitted. ASU Compenstion Retirement Benefits (Topic 715): Improving the Presenttion of Net Periodic Pension Cost nd Net Periodic Postretirement Benefit Cost ASU ws issued to improve the presenttion of net periodic pension cost nd net periodic postretirement benefit cost. The updte requires the employer to report the service cost component in the sme line item or line items s other compenstion costs rising from services rendered by the pertinent employees during the period. The other components of net benefit cost re required to be presented in the income sttement seprtely from the service cost component nd outside subtotl of income from opertions, if one is presented. If seprte line item or items re used to present the other components of net benefit cost, tht line item or items must be ppropritely described. If seprte line item or items re not used, the line item or items used in the income sttement to present the other components of net benefit cost must be disclosed. The mendments lso llow only the service cost component to be eligible for cpitliztion when pplicble (for exmple, s cost of internlly mnufctured inventory or self-constructed sset). The ASU is effective for public business entities for nnul periods beginning fter December 15, 2017, including interim periods within those nnul periods. For other entities, the mendments re effective for nnul periods beginning fter December 15, 2018, nd interim periods within nnul periods beginning fter December 15, Erly doption is permitted s of the beginning of n nnul period for which finncil sttements (interim or nnul) hve not been issued or mde vilble for issunce. ASU Pln Accounting: Defined Benefit Pension Plns (Topic 960); Defined Contribution Pension Plns (Topic 962); Helth nd Welfre Benefit Plns (Topic 965): Employee Benefit Pln Mster Trust Reporting views Under current GAAP, investments in mster trusts re presented in single line item in the sttement of net ssets vilble for benefits with no requirement to disclose the mster trust s other ssets nd libilities. The requirement to disclose the ssets nd libilities of the mster trusts under ASU ws primrily driven by stkeholders views tht disclosure of these blnces is necessry to understnd the single line item presenttion in the sttement of net ssets vilble for benefits. ASU ws issued to improve the usefulness nd clrity of the informtion presented to the users of employee benefit pln finncil sttements relted to employers interests in mster trusts. The mendments require pln s interest in mster trust nd ny chnge in tht interest to be presented in seprte line items in the sttement of net ssets vilble for benefits nd in the sttement of chnges in net ssets vilble for benefits, respectively. Moreover, the mendments remove the requirement to disclose the percentge interest in the mster trust for plns with divided interests nd require tht ll plns disclose the dollr mount of their interest in ech of those generl types of investments. Additionlly, the mendments require ll plns to disclose: () their mster trust s other sset nd libility blnces; nd (b) the dollr mount of the pln s interest in ech of those blnces. Lstly, the mendments eliminte redundnt investment disclosures (for exmple, those required by Topics 815 nd 820) relting to 401(h) ccount ssets. The ASU is effective for both public nd privte entities for fiscl yers beginning fter December 15, Erly doption is permitted. The mendments should be pplied retrospectively to ech period for which finncil sttements re presented. ssurnce 4 First Qurter 2017 Accounting, Reporting & Auditing Developments

5 Accounting & Finncil Reporting Mtters ASU Other Income Gins nd Losses from the Derecognition of Nonfinncil Assets (Subtopic ): Clrifying the Scope of Asset Derecognition Guidnce nd Accounting for Prtil Sles of Nonfinncil Assets ASU ws issued to clrify the scope of Subtopic , Other Income Gins nd losses from the Derecognition of Nonfinncil Assets nd to provide dditionl guidnce for prtil sles of nonfinncil ssets. The mendments clrify tht finncil sset is within the scope of Subtopic if it meets the definition of n in substnce nonfinncil sset. The mendments lso define the term in substnce nonfinncil sset s finncil sset promised to counterprty in contrct if substntilly ll of the fir vlue of the ssets (recognized nd unrecognized) tht re promised to the counterprty in the contrct is concentrted in nonfinncil ssets. In ddition, the mendments clrify tht n entity should identify ech distinct nonfinncil sset or in substnce nonfinncil sset promised to counterprty nd derecognize ech sset when counterprty obtins control of it. Finlly, the mendments require derecognition of distinct nonfinncil sset or distinct in substnce nonfinncil sset in prtil sle trnsction under topics 810 or 606 when it meets certin criteri. The mendments in this Updte exclude ll businesses nd nonprofit ctivities from the scope of Subtopic As such, the derecognition of ll businesses nd nonprofit ctivities (with some exceptions) should be ccounted for in ccordnce with Subtopic , Consolidtion Overll. The ASU is effective for public entities for nnul reporting periods beginning fter December 15, 2017, including interim reporting periods within tht reporting period. For ll other entities, the mendments re effective for nnul reporting periods beginning fter December 15, 2018, nd interim reporting periods within nnul reporting periods beginning fter December 15, ASU Intngibles Goodwill nd Other (Topic 350): Simplifying the Test for Goodwill Impirment ASU ws issued in order to simplify the subsequent mesurement of goodwill. The ASU hs no effect on current guidnce for completing Step 1, however it elimintes Step 2 from the goodwill impirment test. Under the mendments in this ASU, n entity should perform its nnul or interim goodwill impirment test by compring the fir vlue of reporting unit with its crrying mount. An entity will then recognize n impirment chrge for the mount by which the crrying mount exceeds the reporting unit s fir vlue; however the loss recognized should not exceed the totl mount of goodwill llocted to tht reporting unit. The mendments in this ASU lso eliminte the requirements for ny reporting unit with zero or negtive crrying mount to perform qulittive ssessment, nd require disclosure of the mount of goodwill llocted to ech reporting unit with zero or negtive crrying mount of net ssets. Finlly, the ASU did not ffect the option to perform the qulittive ssessment (Step 0) for reporting unit to determine if the quntittive impirment test is necessry nd, privte compnies will still hve the option to elect the PCC lterntive on goodwill. The mendments should be pplied on prospective bsis nd the nture of nd reson for the chnge in ccounting principle should be disclosed upon trnsition. The mendments re effective for public business entities tht re U.S. Securities nd Exchnge Commission (SEC) filers nd should dopt the mendments for their nnul or ny interim goodwill impirment tests in fiscl yers beginning fter December 15, Public business entities tht re not SEC filers should dopt the mendments for their nnul or ny interim goodwill impirment tests in fiscl yers beginning fter December 15, All other entities, including not-for-profit entities, which dopt the mendments should do so for their nnul or ny interim goodwill impirment tests in fiscl yers beginning fter December 15, Erly doption is permitted for interim or nnul goodwill impirment tests performed on testing dtes fter Jnury 1, views An entity should lso consider the income tx effects from ny tx deductible goodwill on the crrying mount of the reporting unit when mesuring the goodwill impirment loss, if pplicble. ASU Accounting Chnges nd Error Corrections (Topic 250) nd Investments Equity Method nd Joint Ventures (Topic 323): Amendments to SEC Prgrphs Pursunt to Stff Announcements t the September 22, 2016 nd November 17, 2016 EITF Meetings ASU ddresses nd codifies the prcticl considertions nd ppliction of the required disclosures under SAB Topic 11.M for the implementtion of ASU , Revenue from Contrcts with Customers (Topic 606); ASU , Leses (Topic 842); nd ASU , Finncil Instruments-Credit Losses (Topic 326): Mesurement of Credit Losses on Finncil Instruments. The SEC Stff hs emphsized on number of occsions, including the December 2016 AICPA Ntionl Conference on Current SEC nd PCAOB Developments, the requirements to disclose the potentil mteril effects of newly issued stndrds nd the importnce of providing investors with this informtion. Such disclosures should explin the impct the new stndrd is expected to hve on the finncil sttements nd how the doption of the new stndrd will ffect comprbility. Entities should discuss both quntittive nd qulittive informtion s vilble when ssessing implementtion of new stndrd. This ASU ws effective immeditely for public business entities. ssurnce 5 First Qurter 2017 Accounting, Reporting & Auditing Developments

6 Accounting & Finncil Reporting Mtters ASU Not-for-Profit Entities Consolidtion (Subtopic ): Clrifying When Not-for-Profit Entity Tht Is Generl Prtner or Limited Prtner Should Consolidte For-Profit Limited Prtnership or Similr Entity ASU clrifies when not-for-profit (NFP) entity tht is generl prtner or limited prtner should consolidte for-profit limited prtnership or similr legl entity once the mendments in ASU , Consolidtion (Topic 810): Amendments to the Consolidtion Anlysis, become effective. The guidnce mintins how not-for-profit generl prtners currently pply the consolidtion guidnce in Subtopic by including tht guidnce within Subtopic This ASU primrily ffects ffordble housing nd rel estte entities. The ASU is effective for not-for-profits for fiscl yers beginning fter December 15, 2016 nd interim periods within fiscl yers beginning fter December 15, Erly doption is permitted, including doption in n interim period. NFPs tht hve not yet dopted the mendments in ASU re required to dopt the mendments in ASU t the sme time they dopt the mendments in ASU nd should pply the sme trnsition method elected for the ppliction of ASU NFPs tht lredy hve dopted the mendments in ASU re required to pply the mendments in ASU retrospectively to ll relevnt prior periods beginning with the fiscl yer in which the mendments in ASU initilly were pplied. ASU Business Combintions (Topic 805): Clrifying the Definition of Business ASU clrifies the definition of business in order to ssist entities with evluting whether trnsctions should be ccounted for s cquisitions (or disposls) of ssets or businesses. The FASB issued this ASU in response to stkeholder feedbck tht the current definition of business in ASC 805 is being pplied too brodly nd the ppliction of the guidnce ws not resulting in consistent ppliction in cost effective mnner. This ASU provides screen whereby trnsction will be ccounted for s n sset purchse (or disposl) if substntilly ll of the fir vlue of the gross ssets cquired (disposed) is concentrted in single identifible sset or group of similr identifible ssets. If the screen is not met, the entity will evlute whether it is business cquisition under revised criteri. The mendments in this ASU re expected to cuse fewer trnsctions to be identified s businesses. While this ASU will pply to ll entities nd industries, it is expected to prticulrly impct the rel estte nd phrmceuticl/biotech industries. The ASU is effective for public business entities in fiscl yers, nd interim periods within those fiscl yers, beginning fter December 15, For ll other entities, the ASU is effective for fiscl yers beginning fter December 15, 2018, nd interim periods within fiscl yers beginning fter December 15, Erly doption is permitted under certin circumstnces. The mendments in this ASU should be pplied prospectively s of the beginning of the period of doption. ASU Technicl Corrections nd Improvements to Topic 606, Revenue from Contrcts with Customers The mendments in ASU ffect nrrow spects of the guidnce in ASU There re 13 issues discussed in the ASU tht either updtes or clrifies the guidnce in Topic 606, such s Lon Gurntee Fees, Impirment Testing of Contrct Costs, Provisions for Losses on Construction-Type nd Production-Type Contrcts, Disclosure of Remining Performnce Obligtions, Disclosure of Prior Period Performnce Obligtions, Contrct Modifictions, Contrct Asset vs. Receivble, Refund Libility, Advertising Costs, Fixed Odds Wgering Contrcts in the Csino Industry, nd Costs Cpitlized for Advisors to Privte Funds nd Public Funds. The effective dte nd trnsition requirements for this guidnce re the sme s Topic 606. U.S. Securities & Exchnge Commission (SEC) SEC s Rule on Exhibit Hyperlinks The SEC dopted finl rule tht will require registrnts to include hyperlinks for ll exhibits listed in the exhibit index. The rule pplies to most registrtion sttements nd reports tht re required to include exhibits under Item 601 of Regultion S-K s well s Forms 20-F nd F-10. The finl rule will tke effect on September 1, 2017 for ccelerted filers nd lrge ccelerted filers, nd September 1, 2018 for smller reporting compnies nd non-ccelerted filers. Non-GAAP Disclosures nd Proxy Sttements The SEC continues its focus on non-gaap mesures presented in SEC filings, including proxy sttements. All of the rules on non- GAAP mesures pply to proxy sttement disclosures. The only exception to the rule is trget levels in the Compenstion Discussion nd Anlysis (CD&A) in the proxy sttement. ssurnce 6 First Qurter 2017 Accounting, Reporting & Auditing Developments

7 Assurnce Mtters Americn Institute of Certified Public Accountnts (AICPA) SAS 132, The Auditor s Considertion of n Entity s Ability to Continue s Going Concern The Auditing Stndrds Bord (ASB) of the AICPA issued Sttement on Auditing Stndrds (SAS) No. 132, The Auditor s Considertion of n Entity s Ability to Continue s Going Concern. The stndrd describes the uditor s responsibilities in the udit of finncil sttements relting to the entity s bility to continue s going concern nd the implictions for the uditor s report. The requirements in the stndrd pply to ll udits of complete set of finncil sttements, irrespective of whether the finncil sttements re prepred in ccordnce with generl purpose or specil purpose frmework. views Although the FASB, AICPA nd PCAOB ll hve guidnce pertining to the considertion of n entity s bility to continue s going concern, it should be noted tht there re differences in ppliction between them. Those differences could potentilly impct the nlyses nd disclosures in the finncil sttements nd uditors reports. Center for Audit Qulity (CAQ) Evluting Mngement Review Controls nd the Root Cuse nd Severity of Control Deficiencies The CAQ hs developed series of video vignettes (ech pproximtely five minutes in length) tht provide insights into the types of converstions tht occur between udit tem members s well s uditors nd preprers. Specificlly, the vignettes ddress some of the chllenges encountered when evluting mngement review controls nd the root cuse nd severity of control deficiencies identified. Additionlly, the discussions cptured in the videos highlight communictions nd interviewing techniques, professionl skepticism, nd how to nvigte converstions on difficult nd sensitive issues. Addressing Chllenges for Highly Subjective nd Complex Accounting Ares The CAQ published the pper, Addressing Chllenges for Highly Subjective nd Complex Accounting Ares, which stems from the discussions nd recommendtions of two Anti-Frud Collbortion conferences held during The pper discusses how improved ccounting policies nd internl controls relted to highly subjective nd complex ccounting res re key for stemming finncil reporting frud nd reducing the number of resttements. Generlly, the requirements of SAS 132 pply to the uditor s responsibilities to perform the following: Conclude, bsed on the udit evidence obtined, whether substntil doubt exists bout n entity s bility to continue s going concern for resonble period of time; nd Evlute the possible finncil sttement effects, including the dequcy of disclosure regrding the entity s bility to continue s going concern for resonble period of time. These requirements pply even if the pplicble finncil reporting frmework used in prepring the finncil sttements does not include n explicit requirement for mngement to mke specific evlution of the entity s bility to continue s going concern. SAS 132 is effective for udits of finncil sttements for periods ending on or fter December 15, ssurnce 7 First Qurter 2017 Accounting, Reporting & Auditing Developments

8 Appendix A - Accounting Stndrds Affecting Public Business Entities in 2017 The following tble presents ASUs tht become effective during 2017 for clendr yer-end public business entities. Plese refer to the individul ASUs in their entirety for dditionl guidnce. Accounting Stndrds Updte Effective Dte Public Business Entities Trnsition Summry ASU Accounting Chnges nd Error Corrections (Topic 250) nd Investments - Equity Method nd Joint Ventures (Topic 323): Amendments to SEC Prgrphs Pursunt to Stff Announcements t the September 22, 2016 nd November 17, 2016 EITF Meetings Immeditely Prospectively ASU ws issued in order to ddress disclosure of the impct tht recently issued ccounting stndrds will hve on the finncil sttements of registrnt when such stndrds re dopted in future period. The SEC Stff expects robust disclosures in ccordnce with Stff Accounting Bulletin (SAB) Topic 11.M for current yer Form 10-K filings nd upcoming qurterly filings. This ASU specificlly ddresses ASU , Revenue from Contrcts with Customers (Topic 606); ASU , Leses (Topic 842); nd ASU , Finncil Instruments-Credit Losses (Topic 326): Mesurement of Credit Losses on Finncil Instruments nd subsequent mendments. ASU Technicl Corrections nd Improvements Amendments under ASC Intngibles - Goodwill nd Other re effective for nnul reporting periods beginning fter December 15, 2016, including interim periods within those nnul periods. Amendments under ASC Fir Vlue Mesurements re effective for fiscl yers beginning fter December 15, 2016, including interim periods within those fiscl yers. Most of the mendments do not require trnsition guidnce nd re effective immeditely. See ASU for individul trnsition guidnce. ASU ws issued to provide incrementl improvements to GAAP through clrifying the Accounting Stndrds Codifiction. The mendments generlly fll into one of the types of ctegories listed below. 1. Amendments relted to differences between originl guidnce (e.g., FASB Sttements, EITF issues, etc.) nd the Codifiction. 2. Guidnce clrifiction nd reference corrections tht provide clrifiction through updting wording, correcting references, or combintion of both. 3. Simplifiction mendments tht stremline or simplify the Codifiction through minor structurl chnges to hedings or minor edits of text to improve the usefulness nd understndbility of the Codifiction. 4. Minor improvements to the guidnce tht re not expected to hve significnt effect on current ccounting prctice or crete significnt dministrtive cost to most. ASU Consolidtion (Topic 810): Interests Held through Relted Prties Tht Are under Common Control Fiscl yers beginning fter December 15, 2016, including interim periods within those fiscl yers 1 - Consistent with method elected for doption of ASU ASU ws issued to mend the consolidtion guidnce on how reporting entity tht is the single decision mker of VIE should tret indirect interests in the entity held through relted prties tht re under common control with the reporting entity when determining whether it is the primry beneficiry of tht VIE. ssurnce 8 First Qurter 2017 Accounting, Reporting & Auditing Developments

9 Appendix A - Accounting Stndrds Affecting Public Business Entities in 2017 Accounting Stndrds Updte Effective Dte Public Business Entities Trnsition Summry ASU Compenstion Stock Compenstion (Topic 718): Improvements to Employee Shre- Bsed Pyment Accounting Fiscl yers beginning fter December 15, 2016, nd interim periods within those yers Prospective, Modified, or The mendments in this ASU re intended to improve the ccounting for employee shre-bsed pyments nd ffect ll orgniztions tht issue shre-bsed pyment wrds to their employees. Severl spects of the ccounting for shre-bsed pyment wrd trnsctions re simplified, including: () income tx consequences; (b) clssifiction of wrds s either equity or libilities; nd (c) clssifiction on the sttement of csh flows. ASU Investments - Equity Method nd Joint Ventures (Topic 323): Simplifying the Trnsition to the Equity Method of Accounting Fiscl yers beginning fter December 15, 2016, including interim periods within those yers. Prospective The mendments eliminte the requirement to retroctively djust n investment upon qulifying for the equity method of ccounting ASU Derivtives nd Hedging (Topic 815): Contingent Put nd Cll Options in Debt Instruments Fiscl yers beginning fter December 15, 2016, including interim periods within those yers. Modified The mendments clrify the required steps to be tken when ssessing whether the economic chrcteristics nd risks of cll/put options re clerly nd closely relted to those of their debt hosts - which is one of the criteri for bifurcting n embedded derivtive. ASU Derivtives nd Hedging (Topic 815): Effect of Derivtive Contrct Novtions on Existing Hedge Accounting Reltionships Fiscl yers beginning fter December 15, 2016, including interim periods within those yers. The mendments clrify tht chnge in the counterprty to derivtive instrument designted s hedging instrument does not, in nd of itself, require de-designtion of tht hedging reltionship provided tht ll other hedge ccounting criteri remin the sme. ASU Income Txes (Topic 740): Blnce Sheet Clssifiction of Deferred Txes Finncil sttements issued for fiscl yers beginning fter December 15, 2016, nd interim periods within those yers. Prospective or The mendments in this ASU require tht deferred tx libilities nd ssets be clssified s noncurrent in clssified sttement of finncil position. ASU , Inventory (Topic 330): Simplifying the Mesurement of Inventory Fiscl yers beginning fter December 15, 2016, including interim periods within those yers Prospective This updte simplifies the mesurement of inventory by requiring inventory to be mesured t the lower of cost nd net relizble vlue. Net relizble vlue is the estimted selling prices in the ordinry course of business, less predictble costs of completion, disposl, nd trnsporttion. The existing stndrds require inventory to be mesured t the lower of cost or mrket, where mrket could be replcement cost, net relizble vlue, or net relizble vlue less norml profit mrgin. ssurnce 9 First Qurter 2017 Accounting, Reporting & Auditing Developments

10 Appendix A - Accounting Stndrds Affecting Public Business Entities in 2018 nd beyond The following tble presents ASUs tht become effective for 2018 fiscl yers nd beyond. Plese refer to the individul ASUs in their entirety for dditionl guidnce. Accounting Stndrds Updte Effective Dte Public Business Enterprises Trnsition Erly Summry ASU Receivbles - Nonrefundble Fees nd Other Costs (Subtopic ): Premium Amortiztion on Purchsed Cllble Debt Securities Fiscl yers beginning fter December 15, 2018, including interim periods within those yers. Modified This ASU ws issued in order to shorten the mortiztion period for certin cllble debt securities held t premium. Specificlly, the mendments require the premium to be mortized to the erliest cll dte. The mendments do not require n ccounting chnge for securities held t discount; the discount continues to be mortized to mturity. ASU Compenstion - Retirement Benefits (Topic 715): Improving the Presenttion of Net Periodic Pension Cost nd Net Periodic Postretirement Benefit Cost Annul reporting periods beginning fter December 15, 2017, including interim reporting periods within those nnul reporting periods. Prospective nd 2 This ASU ws issued to improve the presenttion of net periodic pension cost nd net periodic postretirement benefit cost. The mendments require tht n employer report the service cost component in the sme line item or items s other compenstion costs rising from services rendered by the pertinent employees during the period. The other components of net benefit cost re required to be presented in the income sttement seprtely from the service cost component nd outside subtotl of income from opertions, if one is presented. If seprte line item or items re used to present the other components of net benefit costs, tht line item or items must be ppropritely described. If seprte line item or items re not used, the line item or items used in the income sttement to present the other components of net benefit cost must be disclosed. The mendments lso llow only the service cost component to be eligible for cpitliztion when pplicble (e.g., s cost of internlly mnufctured inventory or self constructed sset). ssurnce 10 First Qurter 2017 Accounting, Reporting & Auditing Developments

11 Appendix A - Accounting Stndrds Affecting Public Business Entities in 2018 nd beyond Accounting Stndrds Updte Effective Dte Public Business Enterprises Trnsition Erly Summry This ASU ws issued to improve the usefulness of the informtion reported to users of employee benefit pln finncil sttements nd to provide clrity to preprers nd uditors. ASU Pln Accounting: Defined Benefit Pension Plns (Topic 960); Defined Contribution Pension Plns (Topic 962); Helth nd Welfre Benefit Plns (Topic 965): Employee Benefit Pln Mster Trust Reporting Fiscl yers beginning fter December 15, The mendments in this ASU require pln's interest in tht mster trust nd ny chnges in tht interest to be presented in seprte line items in the sttement of net ssets vilble for benefits nd in the sttement of chnges in net ssets vilble for benefits, respectively. The mendments lso remove the requirement to disclose the percentge interest in the mster trust for plns with divided interests nd require tht ll plns disclose the dollr mount of their interest in ech of those generl types of investments. The mendments require ll plns to disclose: () their mster trust's other sset nd libility blnces; nd (b) the dollr mount of the pln's interest in ech of those blnces. Lstly, the mendments eliminte redundnt investment disclosures (e.g., those required by Topic 815 nd 820) relting to 401(h) ccount ssets. ASU Other Income - Gins nd Losses from the Derecognition of Nonfinncil Assets (Subtopic ): Clrifying the Scope of Asset Derecognition Guidnce nd Accounting for Prtil Sles of Nonfinncil Assets Annul reporting periods beginning fter December 15, 2017, including interim reporting periods within those nnul reporting periods. 5 This ASU ws issued to clrify tht finncil sset is within the scope of Subtopic if it meets the definition of n in substnce nonfinncil sset. The mendments lso define the term "in substnce finncil sset." The mendments clrify tht nonfinncil ssets within the scope of Subtopic my include nonfinncil ssets trnsferred within legl entity to counterprty. For exmple, prent my trnsfer control of nonfinncil ssets by trnsferring ownership interests in consolidted subsidiry. A contrct tht includes the trnsfer of ownership interests in one or more consolidted subsidiries is within the scope of Subtopic if substntilly ll of the fir vlue of the ssets tht re promised to the counterprty in contrct is concentrted in nonfinncil ssets. The mendments lso clrify tht n entity should identify ech distinct nonfinncil sset or in substnce nonfinncil sset promised to counterprty nd derecognize ech sset when counterprty obtins control of tht sset. ssurnce 11 First Qurter 2017 Accounting, Reporting & Auditing Developments

12 Appendix A - Accounting Stndrds Affecting Public Business Entities in 2018 nd beyond Accounting Stndrds Updte Effective Dte Public Business Enterprises Trnsition Erly Summry ASU Intngibles - Goodwill nd Other (Topic 350): Simplifying the Test for Goodwill Impirment For public business entities tht re SEC filers for nnul or ny interim goodwill impirment tests in fiscl yers beginning fter December 15, For public business entities tht re not SEC filers, the ASU should be dopted for their nnul or ny interim goodwill impirment tests in fiscl yers beginning fter December 15, Prospective 3 This ASU ws issued in order to simplify the subsequent mesurement of goodwill by eliminting the Step 2 goodwill impirment test. Under the mendments in this ASU, n entity should perform its nnul or interim goodwill impirment test by compring the fir vlue of reporting unit with its crrying mount. An entity will then recognize n impirment chrge for the mount by which the crrying mount exceeds the reporting unit s fir vlue; however the loss recognized should not exceed the totl mount of goodwill llocted to tht reporting unit. Additionlly, n entity should consider income tx effects from ny tx deductible goodwill on the crrying mount of the reporting unit when mesuring the goodwill impirment loss, if pplicble. The mendments in this ASU lso eliminted the requirements for ny reporting unit with zero or negtive crrying mount to perform qulittive ssessment nd therefore the sme impirment ssessment now pplies to ll reporting units. An entity is required to disclose the mount of goodwill llocted to ech reporting unit with zero or negtive crrying mount of net ssets. The ASU did not ffect the option to perform the qulittive ssessment (Step 0) for reporting unit to determine if the quntittive impirment test is necessry. ASU Business Combintions (Topic 805): Clrifying the Definition of Business Annul reporting periods beginning fter December 15, 2017, including interim reporting periods within those nnul reporting periods. Prospective 4 ASU ws issued to clrify the definition of business in order to ssist entities with evluting whether trnsctions should be ccounted for s cquisitions (or disposls) of ssets or businesses. This ASU provides screen whereby trnsction will be ccounted for s n sset purchse (or disposl) if substntilly ll of the fir vlue of the gross ssets cquired (disposed) is concentrted in single identifible sset or group of similr identifible ssets. If the screen is not met, the entity will evlute whether it is business cquisition under revised criteri. The mendments in this ASU re expected to cuse fewer trnsctions to be identified s businesses. While this ASU will pply to ll entities nd industries, it is expected to prticulrly impct the rel estte nd phrmceuticl/biotech industries. ssurnce 12 First Qurter 2017 Accounting, Reporting & Auditing Developments

13 Appendix A - Accounting Stndrds Affecting Public Business Entities in 2018 nd beyond Accounting Stndrds Updte Effective Dte Public Business Enterprises Trnsition Erly Summry ASU Technicl Corrections nd Improvements to Topic 606, Revenue from Contrcts with Customers Annul reporting periods beginning fter December 15, 2017, including interim reporting periods within those nnul reporting periods. 5 This ASU is intended to improve the operbility nd understndbility of the implementtion guidnce by providing clrifictions nd prcticl expedients on the following issues: lon gurntee fees, contrct costs, provisions for losses on construction-type nd production-type contrcts, scope of topic 606, disclosure of remining performnce obligtions. disclosure of prior period performnce obligtions, contrct modifictions, contrct sset versus receivble, refund libility, dvertising costs, fixed odds wgering contrcts in the csino industry nd cost cpitliztion for dvisors to privte nd public funds. ASU Sttement of Csh Flows (Topic 230): Restricted Csh Fiscl yers beginning fter December 15, 2017, nd interim periods within those fiscl yers. ASU ws issued to ddress diversity in prctice in the clssifiction nd presenttion of chnge in restricted csh on the sttement of csh flows under Topic 230. The mendments in this Updte require tht sttement of csh flows explin the chnge during the period in the totl of csh, csh equivlents, nd mounts generlly described s restricted csh or restricted csh equivlents. Therefore, mounts generlly described s restricted csh nd restricted csh equivlents should be included with csh nd csh equivlents when reconciling the beginning-of-period nd end-of-period totl mounts shown on the sttement of csh flows. ASU Income Txes (Topic 740): Intr-Entity Trnsfers of Assets Other Thn Inventory Annul reporting periods beginning fter December 15, 2017, including interim reporting periods within those nnul reporting periods. Modified ASU ws issued to improve the ccounting for the income tx consequences of intr-entity trnsfers of ssets other thn inventory. The inititive is designed to reduce the complexity in ccounting stndrds. ssurnce 13 First Qurter 2017 Accounting, Reporting & Auditing Developments

14 Appendix A - Accounting Stndrds Affecting Public Business Entities in 2018 nd beyond Accounting Stndrds Updte Effective Dte Public Business Enterprises Trnsition Erly Summry ASU Sttement of Csh Flows (Topic 230): Clssifiction of Certin Csh Receipts nd Csh Pyments Fiscl yers beginning fter December 15, 2017 nd interim periods within those fiscl yers. Modified ASU ws issued to ddress diversity in prctice of how certin csh receipts nd csh pyments re currently presented nd clssified in the sttement of csh flows. ASU Finncil Instruments Credit Losses (Topic 326): Mesurement of Credit Losses on Finncil Instruments For public business entities tht re SEC filers for fiscl yers, nd interim periods within those fiscl yers, beginning fter December 15, For public business entities tht re not SEC filers, the ASU is effective for fiscl yers beginning fter December 15, 2020, nd interim periods within those fiscl yers. Modified 6 The ASU is intended to improve finncil reporting by requiring timely recording of credit losses on lons nd other finncil instruments held by finncil institutions nd other orgniztions. The ASU requires the mesurement of ll expected credit losses for finncil ssets not recorded t fir vlue bsed on historicl experience, current conditions, nd resonble nd supportble forecsts. ASU Revenue from Contrcts with Customers (Topic 606): Nrrow-Scope Improvements nd Prcticl Expedients Annul reporting periods beginning fter December 15, 2017, including interim reporting periods within those nnul reporting periods. 5 This ASU is intended to improve the operbility nd understndbility of the implementtion guidnce by providing clrifictions nd prcticl expedients on the following issues: ssessing collectbility criterion in prgrph (e) nd ccounting for contrcts tht do not meet the criteri for step one of the revenue recognition model, presenttion of sles txes nd other similr txes collected from customers, noncsh considertions, contrct modifictions t trnsition, completed contrcts t trnsition. ssurnce 14 First Qurter 2017 Accounting, Reporting & Auditing Developments

15 Appendix A - Accounting Stndrds Affecting Public Business Entities in 2018 nd beyond Accounting Stndrds Updte Effective Dte Public Business Enterprises Trnsition Erly Summry ASU No Revenue Recognition (Topic 605) nd Derivtives nd Hedging (Topic 815): Rescission of SEC Guidnce Becuse of Accounting Stndrds Updtes nd Pursunt to Stff Announcements t the Mrch 3, 2016 EITF Meeting Fiscl yers beginning fter December 15, 2017, including interim periods within those yers. This ASU rescinds the following SEC Stff Observer comments tht re codified in Topic 605, Revenue Recognition, nd Topic 932, Extrctive Activities Oil nd Gs, effective upon doption of Topic 606, Revenue from Contrcts with Customers. Specificlly, registrnts should not rely on the following SEC Stff Observer comments upon doption of Topic 606: Revenue nd Expense Recognition for Freight Services in Process, which is codified in prgrph S99-2; Accounting for Shipping nd Hndling Fees nd Costs, which is codified in prgrph S99-1; Accounting for Considertion Given by Vendor to Customer (including Reseller of the Vendor s Products), which is codified in prgrph S99-1; nd Accounting for Gs-Blncing Arrngements (i.e., use of the entitlements method ), which is codified in prgrph S99-5. ASU Revenue from Contrcts with Customers (Topic 606): Identifying Performnce Obligtions nd Licensing Annul reporting periods beginning fter December 15, 2017, including interim reporting periods within those nnul reporting periods. The mendments in this ASU provide clrifiction to 5 two components of Topic 606: 1) identifying performnce obligtions, nd 2) licensing implementtion guidnce. ASU Revenue from Contrcts with Customers (Topic 606): Principl versus Agent Considertions (Reporting Revenue Gross versus Net) Annul reporting periods beginning fter December 15, 2017, including interim reporting periods within those nnul reporting periods. 5 The mendments re intended to improve the implementtion guidnce on principl versus gent considertions by mending existing illustrtive exmples nd dding new exmples. ASU Libilities Extinguishments of Libilities (Subtopic ): Recognition of Brekge for Certin Prepid Stored- Vlue Products Fiscl yers beginning fter December 15, 2017, including interim periods within those yers. The mendments, which pply to entities tht offer certin prepid stored vlue products, provide nrrow scope exception to the guidnce in Subtopic tht requires brekge for those libilities be ccounted for consistent with the brekge guidnce in Topic 606 Revenue from Contrcts with Customers. There is no specific guidnce for the derecognition of prepid stored-vlue product libilities. ssurnce 15 First Qurter 2017 Accounting, Reporting & Auditing Developments

16 Appendix A - Accounting Stndrds Affecting Public Business Entities in 2018 nd beyond Accounting Stndrds Updte Effective Dte Public Business Enterprises Trnsition Erly Summry ASU Leses (Topic 842) Fiscl yers beginning fter December 15, 2018, including interim periods within those yers. Modified All leses (except for short-term leses) will be required to be recognized on the lessee's blnce sheet t commencement dte s lese libility for the obligtion of lese pyments nd right-of-use sset for the right to use/control specified sset for the lese term. Lessor ccounting is lrgely unchnged. See DHG publiction Leses: Not Just For The Footnotes Anymore, issued in Mrch ASU Finncil Instruments Overll (Subtopic ): Recognition nd Mesurement of Finncil Assets nd Finncil Libilities Fiscl yers beginning fter December 15, 2017, including interim periods within those yers. Prospective 7 This ASU mends vrious guidnce such s requiring equity investments to be mesured t fir vlue nd ny chnges in fir vlue to be recognized in the income sttement, public entities to use the exit price notion to mesure the fir vlue of finncil instruments for disclosure purposes, nd seprte presenttion of finncil ssets nd libilities by mesurement ctegory nd form of finncil sset. It lso elimintes the requirement to disclose the methods nd ssumptions used to estimte fir vlue of finncil instruments mesured t mortized cost. See lso, DHG publiction FASB Releses New Stndrd on Clssifiction & Mesurement of Finncil Instruments issued in Jnury ssurnce 16 First Qurter 2017 Accounting, Reporting & Auditing Developments

17 Appendix A - Accounting Stndrds Affecting Public Business Entities in 2018 nd beyond Accounting Stndrds Updte Effective Dte Public Business Enterprises Trnsition Erly Summry ASU : Revenue from Contrcts with Customers (Topic 606) & ASU Revenue From Contrcts With Customers (Topic 606): Deferrl of the Effective Dte Fiscl yers beginning fter December 15, 2017, including interim periods within those yers. On My 28, 2014, the FASB nd the Interntionl Accounting Stndrds Bord (the IASB) (collectively the bords ) issued their sweeping revenue recognition stndrd, Revenue from Contrcts with Customers. This multiyer joint project with the IASB received more thn 1,500 comment letters throughout the process. The core principle of the new stndrd is tht n entity should recognize revenue to depict the trnsfer of promised goods or services to customers in n mount tht reflects the considertion to which the entity expects to be entitled in exchnge for those goods or services. The stndrd provides five-step process for recognizing revenue: 1. Identify the contrct with customer, 2. Identify the performnce obligtions in the contrct, 3. Determine the trnsction price, 4. Allocte the trnsction price to the performnce obligtions in the contrct, nd 5. Recognize revenue when (or s) the entity stisfies performnce obligtion. The mendments in ASU defer the effective dte of ASU , Revenue from Contrcts with Customers (Topic 606) for one yer. For public business entities, erlier ppliction is permitted only s of nnul reporting periods beginning fter December 15, 2016, including interim reporting periods within tht reporting period. All other entities my elect to pply this guidnce s of nnul reporting periods beginning fter December 15, 2016, including interim reporting periods within nnul reporting periods beginning one yer fter the nnul reporting period in which n entity first pplies the guidnce in this ASU. See DHG A&A Updte FASB Issues Long-Awited Revenue Recognition Stndrd, for dditionl informtion. See lso, DHG publiction Getting to the Bottom of the Top Line Prepring to the New Revenue Recognition Stndrd issued Mrch 18, ssurnce 17 First Qurter 2017 Accounting, Reporting & Auditing Developments

18 Appendix A - Accounting Stndrds Affecting Public Business Entities in 2018 nd beyond Footnotes 1. Entities tht hve not yet dopted the mendments in ASU re required to dopt the mendments in this ASU t the sme time they dopt the mendments in ASU nd should pply the sme trnsition method elected for the ppliction of ASU Entities tht lredy hve dopted the mendments in ASU re required to pply the mendments in this Updte retrospectively to ll relevnt prior periods, beginning with the fiscl yer in which the mendments in ASU initilly were pplied. 2. The mendments in this ASU should be pplied retrospectively for the presenttion of the service cost component nd the other components of net periodic pension cost nd net periodic postretirement benefit cost in the income sttement nd prospectively, on nd fter the effective dte, for the cpitliztion of the service cost component of net periodic pension cost nd net periodic postretirement benefit in ssets. The mendments llow prcticl expedient tht permits n employer to use the mounts disclosed in its pension nd other postretirement benefit pln note for the prior comprtive periods s the estimtion bsis for pplying the retrospective presenttion requirements. Disclosure tht the prcticl expedient ws used is required. 3. Erly doption is permitted for interim or nnul goodwill impirment tests performed on testing dtes fter Jnury 1, Erly ppliction of the mendments in this Updte is llowed s follows: () For trnsctions for which the cquisition dte occurs before the issunce dte or effective dte of the mendments, only when the trnsction hs not been reported in finncil sttements tht hve been issued or mde vilble for issunce. (b) For trnsctions in which subsidiry is deconsolidted or group of ssets is derecognized tht occur before the issunce dte or effective dte of the mendments, only when the trnsction hs not been reported in finncil sttements tht hve been issued or mde vilble for issunce. 5. Should dopt concurrently with ASU Erly doption is permitted for ll orgniztions for fiscl yers, nd interim periods within those fiscl yers, beginning fter December 15, Erly ppliction by public business entities to finncil sttements of fiscl yers or interim periods tht hve not yet been issued or, by ll other entities, tht hve not yet been mde vilble for issunce of the following mendments in this Updte re permitted s of the beginning of the fiscl yer of doption: () An entity should present seprtely in other comprehensive income the portion of the totl chnge in the fir vlue of libility resulting from chnge in the instrument-specific credit risk if the entity hs elected to mesure the libility t fir vlue in ccordnce with the fir vlue option for finncil instruments or (b) Entities tht re not public business entities re not required to pply the fir vlue of finncil instruments disclosure guidnce in the Generl Subsection of Section Except for the erly ppliction guidnce discussed here, erly doption of the mendments in this ASU is not permitted. ssurnce 18 First Qurter 2017 Accounting, Reporting & Auditing Developments

19 Appendix B - Accounting Stndrds Affecting Privte Compnies in 2017 nd beyond The following tble presents ASUs tht become effective for 2017 fiscl yers nd beyond for privte compnies. Plese refer to the individul ASUs in their entirety for dditionl guidnce. Accounting Stndrds Updte Privte Compny Effective Dte Trnsition Erly Summry ASU Receivbles - Nonrefundble Fees nd Other Costs (Subtopic ): Premium Amortiztion on Purchsed Cllble Debt Securities Annul periods beginning fter December 15, 2019, nd interim periods within nnul periods beginning fter December 15, Modified This ASU ws issued in order to shorten the mortiztion period for certin cllble debt securities held t premium. Specificlly, the mendments require the premium to be mortized to the erliest cll dte. The mendments do not require n ccounting chnge for securities held t discount; the discount continues to be mortized to mturity. ASU Compenstion - Retirement Benefits (Topic 715): Improving the Presenttion of Net Periodic Pension Cost nd Net Periodic Postretirement Benefit Cost Annul periods beginning fter December 15, 2018, nd interim periods within nnul periods beginning fter December 15, Prospective nd 1 This ASU ws issued to improve the presenttion of net periodic pension cost nd net periodic postretirement benefit cost. The mendments require tht n employer report the service cost component in the sme line item or items s other compenstion costs rising from services rendered by the pertinent employees during the period. The other components of net benefit cost re required to be presented in the income sttement seprtely from the service cost component nd outside subtotl of income from opertions, if one is presented. If seprte line item or items re used to present the other components of net benefit costs, tht line item or items must be ppropritely described. If seprte line item or items re not used, the line item or items used in the income sttement to present the other components of net benefit cost must be disclosed. The mendments lso llow only the service cost component to be eligible for cpitliztion when pplicble (e.g., s cost of internlly mnufctured inventory or self constructed sset). ssurnce 19 First Qurter 2017 Accounting, Reporting & Auditing Developments