| 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
| Mar. 31, 2019 |
| Summary Of Significant Accounting Policies | |
| Basis of Presentation | These statements have been prepared
in accordance with the rules and regulations of the Securities and Exchange Commission ("SEC") and accounting principles
generally accepted in the United States ("GAAP") for interim financial information. They do not include all information
and notes required by GAAP for complete financial statements. However, except as disclosed herein, there has been no material
change in the information disclosed in the notes to financial statements included in Lifeloc's Annual Report on Form 10-K for the
year ended December 31, 2018 as filed with the SEC. In the opinion of management, the accompanying unaudited financial statements
contain all adjustments, consisting of normal recurring accruals necessary for a fair presentation of the financial position as
of March 31, 2019 and December 31, 2018, and the results of operations and cash flows for the quarter ended March 31, 2019.
Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for a full
year. The Company's 2018 Annual Report on Form 10-K includes certain definitions and a summary of significant accounting
policies and should be read in conjunction with this Form 10-Q. |
| Use of Estimates in the Preparation of Financial Statements | The preparation of financial statements
in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions.
Such estimates and assumptions affect the reported amounts of assets and liabilities as well as disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts of sales and expense during the reporting period.
Actual results could differ from those estimates. |
| Fair Value Measurement | Accounting Standards Codification
("ASC") Topic 820, Fair Value Measurements and Disclosures Level 1 - Quoted prices are available
in active markets for identical assets or liabilities as of the reported date. The types of assets and liabilities included in
Level 1 are highly liquid and actively traded instruments with quoted prices, such as equity securities listed on the New York
Stock Exchange. Level 2 - Pricing inputs are other
than quoted prices in active markets, but are either directly or indirectly observable as of the reported date. The types of assets
and liabilities in Level 2 are typically either comparable to actively traded securities or contracts or priced with models using
highly observable inputs. Level 3 - Significant inputs to pricing
that are unobservable as of the reporting date. The types of assets and liabilities included in Level 3 are those with inputs requiring
significant management judgment or estimation, such as complex and subjective models and forecasts used to determine the fair value
of financial transmission rights. |
| Inventories | Inventories are stated at the lower
of cost (first-in, first-out basis) or market. We reduce inventory for estimated obsolete or unmarketable inventory equal to the
difference between the cost of inventory and the estimated market value based upon assumptions about future demand and market conditions.
If actual market conditions are less favorable than those projected by management, additional inventory write-downs may be required. At
March 31, 2019 and December 31, 2018, inventory consisted of the following:
2019 2018
Raw materials & deposits $ 1,455,827 $ 937,276
Work-in-process 60,758 37,338
Finished goods 277,155 435,993
Total gross inventories 1,793,740 1,410,607
Less reserve for obsolescence (120,000 ) (120,000 )
Total net inventories $ 1,673,740 $ 1,290,607 |
| Income Taxes | We account for income taxes under
the provisions of ASC Topic 740, Accounting for Income Taxes The estimated annual effective tax
rate is applied to the year-to-date ordinary income (or loss) at the end of the interim period. ASC 740 prescribes a recognition
threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected
to be taken in a tax return. This pronouncement also provides guidance on derecognition, classification, interest and
penalties, accounting in interim periods, disclosure, and transition. |
| Revenue Recognition | In May 2014, the Financial Accounting
Standards Board ("FASB") issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). Revenue from product sales and supplies
is generally recorded when we ship the product and title has passed to the customer, provided that we have evidence of a customer
arrangement and can conclude that collection is probable. The prices at which we sell our products are fixed and determinable
at the time we accept a customer's order. We recognize revenue from sales to stocking distributors when there is no right of return,
other than for normal warranty claims, and generally have no ongoing obligations related to product sales, except for normal warranty. Revenue from training course licenses
is recognized as revenue at the time of sale. Training and certification revenues are recognized the day the training and
certification occurs. Data recording revenue is recognized based on each day's usage of enrolled devices. Revenues arising from extended warranty
contracts are booked as sales over their life on a straight-line basis. We are providing for customer financing and leasing,
which we recognize as revenue over the applicable lease term. Occasionally, we rent used equipment to customers, and
in those cases, we recognize the revenues as they are earned over the life of the contract. Revenues from rental of equipment
and extended service plans are recognized over the life of the contracts. Royalty income is recognized in accordance
with agreed upon terms, when performance obligations are satisfied, the amount is fixed or determinable and collectability is reasonably
assured. Rental income from space leased to
our tenants is recognized in the month in which it is due, which approximates if it were recognized on a straight-line basis over
the term of the related lease. On occasion we receive customer deposits
for future product orders. Customer deposits are initially recorded as a liability and recognized as revenue when the
product is shipped and title has passed to the customer. Topic 606 requires the disaggregation
of revenue into broad categories, which we have defined as shown below for the three months ended March 31, 2019 and March 31,
2018.
Product sales: 2019 2018
Product sales and supplies $ 1,800,783 $ 1,935,006
Training, certification and data recording 146,496 157,741
Service plans and equipment rental 22,822 29,496
Products subtotal 1,970,101 2,122,243
Royalties 72,838 65,065
Building rentals 25,822 14,601
Total revenues $ 2,068,761 $ 2,201,909 |
| Deferred Revenue | Deferred revenues arise from service
contracts and from development contracts. Revenues from service contracts are recognized on a straight-line basis
over the life of the contract, generally one year, and are included in product revenue in our statements of income. However,
there are occasions when they are written for longer terms up to four years. The revenues from that portion of the contract
that extend beyond one year are shown in our balance sheets as long term. Deferred revenues also result from progress
payments received on development contracts; those revenues are recognized when the contract is complete, and are included in product
revenue in our statements of income. All development contracts are for less than one year and all deferred revenues
from this source are shown in our balance sheets as short term. |
| Recent Accounting Pronouncements | We have reviewed all recently issued,
but not yet effective, accounting pronouncements. In January 2016, the FASB issued
ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities In February 2016, the FASB issued
ASU No. 2016-02, Leases (Topic 842) |
| Stock-Based Compensation | Stock-based compensation is presented
in accordance with the guidance of ASC Topic 718, Compensation – Stock Compensation ASC 718 requires companies to estimate
the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion
of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in the accompanying
statement of income. Stock-based compensation expense
recognized during the period is based on the value of the portion of share-based payment awards that is ultimately expected to
vest during the period. We used the Black-Scholes option-pricing model to determine fair value. Our determination of
fair value of share-based payment awards on the date of grant using an option-pricing model is affected by our stock price as well
as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to our
expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors.
Although the fair value of employee stock options is determined in accordance with ASC 718 using an option-pricing model, that
value may not be indicative of the fair value observed in a willing buyer/willing seller market transaction. Stock-based compensation expense
recognized under ASC 718 for the three months ended March 31, 2019 and 2018 was $2,162 and $5,714 respectively. These amounts consist
of stock-based compensation expenses from grants of employee stock options which are allocated to General and Administrative Expense
when incurred. |
| Segment Reporting | We have concluded that we have two
operating segments, including our primary business which is as a developer, manufacturer, lessor and marketer of portable hand-held
breathalyzers and related accessories, supplies and education. As a result of purchasing our building on October 31, 2014,
we have a second segment consisting of renting portions of our building to existing tenants, whose leases expire at various times
until July 31, 2020. |
