| Nature Of Business And Summary Of Significant Accounting Policies | Note 1. Nature of Business and Summary of Significant Accounting Policies Nature of business: 854,000 801,000 A summary of the Company's significant accounting policies follows:
Use of estimates:
Revenue recognition: Direct patient sales are recorded at amounts to be received from patients under reimbursement arrangements with third-party payers, including private insurers, prepaid health plans, Medicare and Medicaid. In addition, the Company records an estimate for selling price adjustments that often arise from changes in a patient's insurance coverage, changes in a patient's domicile, insurance company coverage limitations or patient death. Other than the installment sales as discussed below, the Company expects to receive payment on the vast majority of accounts receivable within one year and therefore has classified all accounts receivable as current. However, in some instances, payment for direct patient sales can be delayed or interrupted, resulting in a portion of collections occurring later than one year. Certain third-party reimbursement agencies pay the Company on a monthly installment basis, which can span over several years. Due to the length of time over which cash is collected and the inherent uncertainty of collectability with these installment sales, the Company cannot make a reasonable estimate of revenue at the time of sale and does not record accounts receivable or revenue at the time of product shipment. Under the installment method, the Company defers the revenue associated with the sale and, as each installment is received, that amount is recognized as revenue. Deferred costs associated with the sale are amortized to cost of revenue ratably over the estimated period in which collections are scheduled to occur. Sales made under the installment method were as follows:
Years Ended June 30, 2015 2014 Revenue recognized under installment sales $ 1,487,000 $ 1,100,000 Amortized cost of revenues recognized 168,000 149,000 Unrecognized installment method sales were as follows:
June 30, 2015 2014 Estimated unrecognized sales, net of discounts $ 2,053,000 $ 1,908,000 Unamortized costs of revenues included in prepaid and other current assets and other assets 315,000 305,000
Shipping and handling expense: 295,000 290,000
Cash:
Accounts receivable: 45,000
Inventories:
Property and equipment:
Finite-life intangible assets:
Long-lived assets: If the Company believes the carrying value is unrecoverable, it would recognize an impairment charge necessary to reduce the unamortized balance to the estimated fair value of the asset or asset group. The amount of such impairment would be charged to operations in the current period.
Warranty liability: three all C hanges in the Company's warranty liability were approximately as follows:
Years Ended June 30, 2015 2014 Beginning warranty reserve $ 700,000 $ 680,000 Accrual for products sold 139,000 196,000 Expenditures and costs incurred for warranty claims (179,000 ) (176,000 ) Ending warranty reserve $ 660,000 $ 700,000
Income taxes: The Company recognizes tax liabilities when the Company believes that certain positions may not be fully sustained upon review by tax authorities. Benefits from tax positions are measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon settlement. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences impact income tax expense in the period in which such determination is made. Interest and penalties, if any, related to accrued liabilities for potential tax assessments are included in income tax expense.
Research and development:
Advertising costs: 336,000 499,000
Share-based payments:
Fair value of financial instruments:
Basic and diluted earnings (loss) per share: assume the conversion, exercise or issuance of all potential common stock instruments unless their effect is anti-dilutive, thereby reducing the earnings or increasing the earnings per share. Common stock equivalents of 539,900 604,900
New Accounting Pronouncements: In April 2015, the FASB issued ASU 2015-03, "Simplifying the Presentation of Debt Issuance Costs." This standard, which will be effective July 1, 2016 for the Company, requires that debt issuance costs be presented as a direct deduction from the carrying amount of long-term debt on the balance sheet. The new guidance aligns the presentation of debt issuance costs with debt discounts and premiums. The standard is to be applied retrospectively to all prior periods presented. As of June 30, 2015, the Company had approximately $ 21,000 In July 2015, the FASB issued ASU 2015-11, "Inventory (Topic 330) Related to Simplifying the Measurement of Inventory," that applies to all inventory except that which is measured using last-in, first-out (LIFO) or the retail inventory method. Inventory measured using first-in, first-out (FIFO) or average cost is within the scope of the new guidance and should be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable cost of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO of the retail inventory method. The amendments are effective for public business entities for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The new guidance should be applied prospectively, and earlier application is permitted as of the beginning of an interim or annual reporting period. The Company is evaluating the impact of the standard on its financial statements.
Reclassifications: |
