• Filing Date: 2017-02-21
  • Form Type: 10-Q
  • Description: Quarterly report
v3.6.0.2
Note 2 - Significant Accounting Policies
9 Months Ended
Dec. 31, 2016
Notes to Financial Statements  
Significant Accounting Policies [Text Block]
NOTE
2
- SIGNIFICANT ACCOUNTING POLICIES
 
PRINCIPLES OF CONSOLIDATION
 
The condensed consolidated financial statements include the accounts of ADM Tronics Unlimited, Inc. and its wholly owned subsidiary Sonotron. All significant intercompany balances and transactions have been eliminated in consolidation.
 
USE OF ESTIMATES
 
These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and, accordingly, require management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. Significant estimates made by management include expected economic life and value of our medical devices, reserves, deferred tax assets, valuation allowance, impairment of long lived assets, fair value of equity instruments issued to consultants for services and fair value of equity instruments issued to others, option and warrant expenses related to compensation to employees and directors, consultants and investment banks, allowance for doubtful accounts, and warranty reserves. Actual results could differ from those estimates.  
 
REVENUE RECOGNITION
 
CHEMICAL PRODUCTS:
 
Revenues are recognized when products are shipped to end users. Shipments to distributors are recognized as revenue when no right of return exists.
 
ELECTRONICS: 
 
We recognize revenue from the sale of our electronic products when they are shipped to the purchaser. We offer a limited
90
-day warranty on our electronics products and a limited
5
-year warranty on our electronic controllers for spas and hot tubs. We have no other post shipment obligations. Based on prior experience, no amounts have been accrued for potential warranty costs and actual costs were less than
$2,000,
for each of the
three
and
nine
months ended
December
31,
2016
and
2015.
For contract manufacturing, revenues are recognized after shipment of the completed products. 
 
ENGINEERING SERVICES: 
 
We provide certain engineering services, including research, development, quality control, and quality assurance services along with regulatory compliance services. We recognize revenue from engineering services as the services are provided. 
 
EARNINGS PER SHARE
 
Basic earnings per share is calculated based on the weighted average number of common shares outstanding during the periods. Diluted earnings per share is computed similar to basic earnings per share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential shares had been issued and if the additional shares were dilutive.
  
Per share basic and diluted earnings amounted to
$0.00
and
$0.01
and
$0.00
and
$0.02
 for the
three
and
nine
months ended
December
31,
2016
and
2015,
respectively. There were
3,000,000
and
3,600,000
common stock equivalents at
December
31,
2016
and
2015,
respectively.
 
RECLASSIFICATION
 
Certain items in the prior financial statements have been reclassified to conform to the current period presentation.
 
RECENT ACCOUNTING PRONOUNCEMENTS
 
Management does not believe that any recently issued, but not yet effective accounting pronouncement, if adopted, would have a material effect on the accompanying condensed consolidated financial statements.