Significant Accounting Policies (Policies)	9 Months Ended
Significant Accounting Policies (Policies)	Mar. 31, 2019
Significant Accounting Policies
Basis of Presentation	Basis of Presentation The Company’s fiscal year begins July 1 and ends June 30, and the quarters for interim reporting consist of thirteen weeks; therefore, the quarter end will not always coincide with the date of the calendar month-end. The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial reporting and pursuant to the applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Pursuant to these rules and regulations, certain information and note disclosures, normally included in financial statements prepared in accordance with GAAP, have been condensed or omitted. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring adjustments necessary for a fair presentation of its financial position and results of operations. Interim results of operations are not necessarily indicative of the results that may be achieved for the full year. The consolidated balance sheet as of June 30, 2018, was derived from the audited financial statements as of that date, but does not include all disclosures, including notes required by GAAP. As such, this quarterly report should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2018. The Company follows the same accounting policies for preparing quarterly and annual reports.
Principles of Consolidation	Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of ARC and its wholly-owned subsidiaries. All material intercompany transactions have been eliminated in consolidation.
Correction of Immaterial Errors	Correction of Immaterial Errors In the first quarter of fiscal year 2019, the Company's management determined that there was an error with respect to the recording of the full cost absorption adjustment for inventory. The Company assessed the materiality of the misstatement both quantitatively and qualitatively and determined that the error was immaterial to all prior consolidated financial statements taken as a whole. Accordingly, prior period amounts have not been adjusted to reflect the correction of the error. The correction resulted in an increase in gross profit for the nine months ended March 31, 2019 of $1.0 million which related to the reporting period for the three months ended September 30, 2018.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and reported amounts of revenue and expenses during the reporting period. Due to the inherent uncertainties in making estimates, actual results could differ from those estimates and such differences may be material to the consolidated financial statements. The Company’s significant estimates include allowance for doubtful accounts, reserve for inventory obsolescence, valuation of share-based compensation, useful lives of long-lived assets, valuation of long-lived assets, and income taxes.
Comprehensive Income (Loss)	Comprehensive Income (Loss) For each of the quarters ended March 31, 2019 and April 1, 2018, there were no material differences between net loss and comprehensive loss.
Revenue Recognition	Revenue Recognition On January 1, 2018, the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers and all the related amendments (the “new revenue standard”) with respect to all contracts using the modified retrospective method. As a majority of the Company’s sales revenue continues to be recognized when products are shipped from its manufacturing facility, and there was no material change in the recognition model historically applied to contracts with customers under the new revenue standard, and there was no adjustment to the opening balance of retained earnings. The impact to the Company’s results of operations is not expected to be material, on an on-going basis, because the analysis of the Company’s contracts under the new revenue standard supports a recognition model consistent with the Company’s current revenue recognition model. The Company has historically recognized revenue from two streams, product revenue and tooling revenue. Product revenues are primarily generated from the sale of MIM and related products. Revenue from product sales is recognized as products are shipped, as the Company transfers control to the customer and is entitled to payment upon shipment. Tooling revenue is earned from manufacturing multiple tools, molds, and assembly equipment as part of a tooling program for that customer. Each tooling program consists of a significant service of production, with highly customized products being produced for each customer. As such, each tooling agreement consists of a single performance obligation. Based on the arrangement with the customer, the Company recognizes revenue at the time products are shipped, as the Company transfers control of the tooling product to the customer and is entitled payment upon shipment. The Company has elected to exclude from measurement of the transaction price all taxes (e.g., sales, use, value added and certain excise taxes) that are assessed by a governmental authority in connection with a specific revenue-producing transaction and collected by the Company from the customer. Accordingly, the Company recognizes revenue net of sales taxes. The revenue and cost for freight and shipping is recorded when control over the sale of goods passes to the Company’s customers. The Company offers assurance-type warranties for its products and does not have any material separate performance obligations related to these warranties. The Company’s historical rates of return are insignificant as a percentage of sales and, as a result, the Company does not record a reserve for returns at the time the Company recognizes revenue. Applying the practical expedient in ASC 340-40-25-4, the Company recognizes the incremental costs of obtaining contracts as an expense when incurred since the amortization period of the assets that the Company otherwise would have recognized is one year or less. The Company has elected the practical expedient detailed at ASC 606-10-50-13, whereas revenue for unsatisfied performance obligations that will be billed in future periods has not been disclosed. Deferred revenue consists of customer deposits for the development of the tooling revenue component for the purpose of manufacturing the assembly part. However, as this does not trigger any income as no products have changed hands and this is done more as a collectability measure with the Customer, no other actions other than recording the deposit occur at the time of the transaction. The Company recognizes revenue and the related expenses when the customer approves and accepts delivery of the tooling part component, which is the time when the performance obligation of providing product to the customer occurs. Costs incurred related to tooling components in the process of being developed are deferred and are included as a current assets on the balance sheet. The Company does not have material amounts of contract assets since revenue is recognized as control of goods is transferred. Contract liabilities consist of customer deposits and deferred revenue. For the nine months ended March 31, 2019, the Company recognized revenue of $0.6 million related to the deferred revenue at June 30, 2018. In regards to the assembly parts, revenue is recognized when the assembly parts are shipped at the Company’s loading dock, which is when the customer takes control of the goods and the performance obligation is satisfied. The Company does not examine the effects of a financing component as the timing difference between performance and payment is less than 12 months. The Company applies this practical expedient to all contracts entered into for all products. We did not record any adjustments to our financial statements as part of the adoption of ASU 2014-09. The Company reported segment disclosures at Note 12, which presents disaggregated revenue information for financial reporting purposes.
Accounting Pronouncements Adopted in the Current Period and Recent Accounting Pronouncements	Accounting Pronouncements Adopted in the Current Period In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers: Topic 606 (“ASU 2014-09”), to supersede nearly all existing revenue recognition guidance under GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASU 2014-09 defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing GAAP including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU 2014-09 is effective in the Company’s first quarter of fiscal 2019 and the Company may transition to the standard using either the full retrospective approach or retrospectively with a cumulative effect of initially applying the amendments recognized at the date of initial application. The Company has adopted ASU 2014-09 as of July 1, 2018 and no cumulative effect of the adoption was required. We obtained an understanding of the new standard and determined that the Company will retain much of the same accounting treatment used to recognize revenue as compared to the then existing standards. See below for the Company’s updated revenue recognition policy. Revenue Recognition On January 1, 2018, the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers and all the related amendments (the “new revenue standard”) with respect to all contracts using the modified retrospective method. As a majority of the Company’s sales revenue continues to be recognized when products are shipped from its manufacturing facility, and there was no material change in the recognition model historically applied to contracts with customers under the new revenue standard, and there was no adjustment to the opening balance of retained earnings. The impact to the Company’s results of operations is not expected to be material, on an on-going basis, because the analysis of the Company’s contracts under the new revenue standard supports a recognition model consistent with the Company’s current revenue recognition model. The Company has historically recognized revenue from two streams, product revenue and tooling revenue. Product revenues are primarily generated from the sale of MIM and related products. Revenue from product sales is recognized as products are shipped, as the Company transfers control to the customer and is entitled to payment upon shipment. Tooling revenue is earned from manufacturing multiple tools, molds, and assembly equipment as part of a tooling program for that customer. Each tooling program consists of a significant service of production, with highly customized products being produced for each customer. As such, each tooling agreement consists of a single performance obligation. Based on the arrangement with the customer, the Company recognizes revenue at the time products are shipped, as the Company transfers control of the tooling product to the customer and is entitled payment upon shipment. The Company has elected to exclude from measurement of the transaction price all taxes (e.g., sales, use, value added and certain excise taxes) that are assessed by a governmental authority in connection with a specific revenue-producing transaction and collected by the Company from the customer. Accordingly, the Company recognizes revenue net of sales taxes. The revenue and cost for freight and shipping is recorded when control over the sale of goods passes to the Company’s customers. The Company offers assurance-type warranties for its products and does not have any material separate performance obligations related to these warranties. The Company’s historical rates of return are insignificant as a percentage of sales and, as a result, the Company does not record a reserve for returns at the time the Company recognizes revenue. Applying the practical expedient in ASC 340-40-25-4, the Company recognizes the incremental costs of obtaining contracts as an expense when incurred since the amortization period of the assets that the Company otherwise would have recognized is one year or less. The Company has elected the practical expedient detailed at ASC 606-10-50-13, whereas revenue for unsatisfied performance obligations that will be billed in future periods has not been disclosed. Deferred revenue consists of customer deposits for the development of the tooling revenue component for the purpose of manufacturing the assembly part. However, as this does not trigger any income as no products have changed hands and this is done more as a collectability measure with the Customer, no other actions other than recording the deposit occur at the time of the transaction. The Company recognizes revenue and the related expenses when the customer approves and accepts delivery of the tooling part component, which is the time when the performance obligation of providing product to the customer occurs. Costs incurred related to tooling components in the process of being developed are deferred and are included as a current assets on the balance sheet. The Company does not have material amounts of contract assets since revenue is recognized as control of goods is transferred. Contract liabilities consist of customer deposits and deferred revenue. For the nine months ended March 31, 2019, the Company recognized revenue of $0.6 million related to the deferred revenue at June 30, 2018. In regards to the assembly parts, revenue is recognized when the assembly parts are shipped at the Company’s loading dock, which is when the customer takes control of the goods and the performance obligation is satisfied. The Company does not examine the effects of a financing component as the timing difference between performance and payment is less than 12 months. The Company applies this practical expedient to all contracts entered into for all products. We did not record any adjustments to our financial statements as part of the adoption of ASU 2014-09. The Company reported segment disclosures at Note 12, which presents disaggregated revenue information for financial reporting purposes. Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases: Topic 842 (“ASU 2016-02”), to supersede nearly all existing lease guidance under GAAP. ASU 2016-02 requires the recognition of lease assets and lease liabilities on the balance sheet by lessees for those leases currently classified as operating leases. ASU 2016-02 also requires qualitative disclosures along with specific quantitative disclosures and is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. Entities are required to apply the amendments at the beginning of the earliest period presented using a modified retrospective approach. We are evaluating additional changes to our processes and internal controls to ensure we meet the standard’s reporting and disclosure requirements. While we continue to evaluate the effect of the standard on our consolidated financial statements, the adoption of the ASU will result in the recognition of a right of use asset and related liability with an estimated immaterial effect to our retained earnings. The Company is evaluating the requirements of this guidance and has not yet determined the impact of the adoption on its consolidated financial position, results of operations and cash flows; however, the Company’s operating lease commitments are disclosed in Note 12, Commitments and Contingencies, of the Company’s Form 10-K for the fiscal year ended June 30, 2018. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses: Topic 326 (“ASU 2016-13”), which requires entities to use a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowances for losses. ASU 2016-13 is effective for annual periods beginning after December 15, 2019, including interim periods within that year. Early adoption is permitted. The adoption of ASU 2016-03 is not expected to have a material effect on the Company’s consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other: Topic 350 (“ASU 2017-04”), which eliminates Step 2 from the goodwill impairment test. The annual, or interim, goodwill impairment test is performed by comparing fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. ASU 2017-04 also eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative step, to perform Step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. ASU 2017-04 is effective for all public businesses that are SEC filers for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The Company is currently evaluating the impact of ASU 2017-04 on the financial statements. There was no impairment noted during nine months ended March 31, 2019, but the Company expects that this standard will impact the financial statements if an impairment is indicated.

ARC Group Worldwide, Inc. 10-Q