Correction of Immaterial Errors to Previously Issued Consolidated Financial Statements |
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| Correction of Immaterial Errors to Previously Issued Consolidated Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Correction of Immaterial Errors to Previously Issued Consolidated Financial Statements |
Correction of Immaterial Errors to Previously Issued Consolidated Financial Statements
Subsequent to the issuance of the December 31, 2022 financial statements the Company identified an error in the implementation of ASC 842. The Company inappropriately applied ASC 606 to certain rental agreements that were originally considered service contracts but contained attributes consistent with rental agreements governed by ASC 842. The required disclosures to be included within the Notes to the Consolidated Financial Statements have been revised to reflect the conclusions regarding the accounting guidance that governs that Company’s rental revenues. The Company previously reported revenues from contracts with customers recognized under ASC 606 of $109.9 million and $102.4 million for the years ended December 31, 2022 and 2021, respectively. The Company corrected this error in the current period to disclose $85.5 million and $80.7 million of revenue from contracts with customers recognized under ASC 606 for the years ended December 31, 2022
and 2021, respectively, and $24.4 million and $21.7 million of rental revenues recognized under ASC 842 for the years ended December 31, 2022 and 2021, respectively. The accounting for these rental agreements under ASC 842 (as opposed to ASC 606) had no impact on amounts reported as net revenues, cost of revenues, gross profit, operating income, net income, or earnings per share in prior years, and there is no prior year impact on any caption or amount reported in any prior year Consolidated Financial Statements (Consolidated Balance Sheets, Consolidated Statements of Operations and Comprehensive Income, Consolidated Statements of Stockholders’ Equity or Consolidated Statements of Cash Flows).
Additionally, the Company identified an error in the cost classifications related to pumps, pump parts, accessories, and services that were originally classified as general and administrative expenses and should have been recorded as cost of revenues. As a result, the Company has reclassified certain of these costs within its Consolidated Statements of Operations and Comprehensive Income for the years ended December 31, 2022 and 2021, respectively. This error also impacted the Company’s disclosure of business segment information for the Device Solutions segment. Gross profit of Device Solutions decreased by $2.0 million and $1.7 million for the years ended December 31, 2022 and 2021, respectively. The reclassification did not impact net revenues, operating income, net income, or earnings per share. The table below sets forth the Company’s Consolidated Statements of Operations and Comprehensive Income that were impacted by the error described above, including as previously reported, the adjustments resulting from the error, and the as revised balances for the years ended December 31, 2022 and 2021, respectively. The Company evaluated the impact of these errors on its previously issued consolidated financial statements and concluded the errors are not material.
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