Company: AAOI
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001437749-25-015518
Chunk: 7

Company: APPLIED OPTOELECTRONICS, INC.
Filing Date: 2025-05-08
Form: 10-Q
Item: Part I, Item 1
Chunk 7
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 those estimates in the consolidated financial statements and accompanying notes. Significant estimates and assumptions that impact these financial statements and the accompanying notes relate to, among other things, revenue recognition, allowance for doubtful accounts, inventory reserve, impairment of long-lived assets, service and product warranty costs, share-based compensation expense, estimated useful lives of tangible and intangible assets, and taxes.

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   Note 2.  Significant Accounting Policies
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   There have been no changes in the Company’s significant accounting policies for the three months ended  March 31, 2025, as compared to the significant accounting policies described in its 2024 Annual Report.
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   Recent Accounting Pronouncements
            
              There was no accounting pronouncement adopted in the first quarter of 2025.
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   Recent Accounting Pronouncements Yet to be Adopted
    
   In  November 2024, the Financial Accounting Standard Board ("FASB") issued Accounting Standard Update ("ASU") 2024-03 "Income Statement: Reporting Comprehensive Income/Expense Disaggregation Disclosures (Subtopic 220-40)" to improve the disclosures about an entity's expenses. Upon adoption, we will be required to disclose in the notes a disaggregation of certain expense categories included within the expense captions of the income statement. The standard is effective for our 2027 annual period, and our interim periods beginning in 2028. The Company is currently evaluating the impact of the new standard will have on its financial statements and related disclosures.  
   In  December 2023, the FASB issued ASU 2023-09 "Income Taxes (Topic 740): Improvements to Income Tax Disclosures", which requires the Company to disclose disaggregated jurisdictional and categorical information for the tax rate reconciliation, income taxes paid and other income tax related amounts. This guidance is effective for annual periods beginning after  December 15, 2024, with early adoption permitted.  ASU 2023-09 will be effective for the Company for the year ending  December 31, 2025. The adoption is expected to enhance the Company's Notes to the Consolidated Financial Statements. The Company is currently evaluating the impact the new standard will have on its annual financial statements and related disclosure.
    
   In  October 2023, the FASB issued ASU 2023-06 "C