• Filing Date: 2019-02-19
  • Form Type: 10-Q
  • Description: Quarterly report
v3.10.0.1
Significant Accounting Policies (Policies)
9 Months Ended
Dec. 31, 2018
Accounting Policies [Abstract]  
Consolidation, Policy [Policy Text Block]
RINCIPLES OF CONSOLIDATION
 
The condensed consolidated financial statements include the accounts of ADM Tronics Unlimited, Inc. and its wholly owned subsidiary, Sonotron Medical Systems, Inc. All significant intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates, Policy [Policy Text Block]
USE OF ESTIMATES
 
These unaudited condensed consolidated financial statements have been prepared in accordance with US GAAP and, accordingly, requires 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, Policy [Policy Text Block]
REVENUE RECOGNITION 
 
In
May 2014,
the FASB issued guidance codified in ASC
606
which amends the guidance in former ASC
605,
“Revenue Recognition.” The core principle of the standard is to recognize revenue when control of the promised goods or services is transferred to customers in an amount that reflects the consideration expected to be received for those goods or services. The standard also requires additional disclosures around the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.
 
We typically extend credit terms to our customers based on their credit worthiness and generally do
not
receive advance payments. As such, we record accounts receivable at the time of shipment, when our right to the consideration becomes unconditional. Accounts receivable from our customers are typically due within
30
days of invoicing. An allowance for doubtful accounts is provided based on a periodic analysis of individual account balances, including an evaluation of days outstanding, payment history, recent payment trends, and our assessment of our customers' creditworthiness.
 
CHEMICAL PRODUCTS:
 
Revenues are recognized upon shipment to a customer because that is when the customer obtains control of the promised good.
  
ELECTRONICS: 
 
We recognize revenue from the sale of our electronic products upon shipment to a customer because that is when the customer obtains control of the promised good. We offer a limited 
90
-day warranty on our electronics products. 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, 2018
and
2017.
 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, Policy [Policy Text Block]
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
 for both the 
three
and
nine
 months ended 
December 31, 2018
and
December 31, 2017, 
respectively.
New Accounting Pronouncements, Policy [Policy Text Block]
RECENT ACCOUNTING PRONOUNCEMENTS
 
In accordance with the Company's implementation of ASU
2015
-
17
"Income Taxes, Balance Sheet Classification of Deferred Taxes", deferred tax assets and liabilities have been netted and presented as
one
non-current amount. The Company has applied this standard retroactively to all periods presented. The implementation of this standard did
not
have an impact on the Company's financial statements.
 
Effective
April 1, 2018
the Company adopted ASC Topic
606
“Revenue from Contracts with Customers”, using the modified retrospective method. This guidance supersedes nearly all existing revenue recognition guidance under US GAAP. The core principle of the guidance is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods and services. The Company has drafted its accounting policy for the new standard based on a detailed review of its business and contracts. Based on the new guidance, the Company will continue recognizing revenue at the time its products are shipped, and therefore adoption of the standard did
not
have a material impact on its consolidated financial statements and is
not
expected to have a material impact in the future.
 
In
July 2015,
the FASB issued ASU
2015
-
11,
“ Inventory. Simplifying the Measurement of Inventory.” This amendment requires companies to measure inventory at the lower of cost and net realizable value. The Company adopted this amendment in
April 2017,
and the implementation did
not
have a material impact on the Company's consolidated financial statements.
 
In
February 2016,
the FASB issued ASU
2016
-
02,
“Leases”, which is intended to improve financial reporting for lease transactions. This ASU will require organizations that lease assets, such as real estate and manufacturing equipment, to recognize both assets and liabilities on their balance sheet for the rights to use those assets for the lease term and obligations to make the lease payments created by those leases that have terms of greater than
12
months. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as finance or operating lease. This ASU will also require disclosures to help investors and other financial statement users better understand the amount and timing of cash flows arising from leases. These disclosures will include qualitative and quantitative requirements, providing additional information about the amounts recorded in the consolidated financial statements. This ASU will be adopted by the Company in
April 2019.
We do
not
believe that this ASU will have a material impact on our consolidated financial statements.
 
In
June 2016,
the FASB issued ASU-
2016
-
13
“Financial Instruments – Credit Losses”. This guidance affects organizations that hold financial assets and net investments in leases that are
not
accounted for at fair value with changes in fair value reported in net income. The guidance requires organizations to measure all expected credit losses for financial instruments at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. It is effective for fiscal years beginning after
December 15, 2019.
The Company is evaluating the potential impact on the Company’s consolidated financial statements.
 
In
February 2018,
the FASB issued ASU
2018
-
02,
“Income Statement- Reporting Comprehensive Income (Topic
220
): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” This guidance gives businesses the option of reclassifying to retained earnings the so-called “stranded tax effects” left in accumulated other comprehensive income due to the reduction in the corporate income tax rate resulting from the
2017
Tax Cuts and Jobs Act. This amendment is effective for all organizations for fiscal years beginning after
December 15, 2018
and interim periods within those fiscal years. Early adoption is allowed. We do
not
believe that this ASU will have a material impact on our consolidated financial statements.
 
In
June 2018,
the FASB issued ASU
2018
-
07,
“Stock Compensation (Topic
718
): Improvements to Nonemployee Share-Based Payment Accounting.” This guidance intends to reduce cost and complexity and to improve financial reporting for share-based payments issued to nonemployees. This amendment is effective for public companies with fiscal years beginning after
December 15, 2018,
including interim periods within that fiscal year. Early adoption is permitted. This ASU does
not
apply to the company at this time.
 
Management does
not
believe that any other recently issued, but
not
yet effective accounting pronouncement, if adopted, would have a material effect on the accompanying consolidated financial statements.