NOTE 9. DEFERRED FINANCING COSTS

 

Deferred financing costs consist of underwriting and legal fees incurred in conjunction with entering our revolving credit facility of $25.0 million (“Revolver”). These costs are being amortized to non-cash interest expense over the five year life of the Revolver using the effective interest method based on an imputed interest rate of 4.58%. During each of the three month periods ending March 31, 2015 and 2016, we recorded amortization of deferred financing costs of approximately $18,000. As discussed in Note 10, we adopted ASU 2015-03, as amended by ASU 2015-15, as of January 1, 2016, the effective date for Salem. We chose to continue presentation of debt issue costs associated with our Revolver as an asset in accordance with ASU 2015-15. We have retrospectively accounted for the implementation of ASU 2015-03 and ASU 2015-15 as a change in accounting principle. We have reclassified debt issue costs reported on our December 31, 2015 condensed consolidated balance sheet as follows:

 

		December 31, 2015
		(Dollars in thousands)
		As Reported			As Updated ASU 2015-03
Balance Sheet Line Item:
Deferred financing costs		$	2,512		$	151