| Significant Accounting Policies [Text Block] | B - Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of America’s Car-Mart, Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated. Segment Information Each dealership is an operating segment with its results regularly reviewed by the Company’s chief operating decision maker in an effort to make decisions about resources to be allocated to the segment and to assess its performance. Individual dealerships meet the aggregation criteria for reporting purposes under the current accounting guidance. In the Integrated Auto Sales and Finance industry, the nature of the sale and the financing of the transaction, financing processes, the type of customer and the methods used to distribute the Company’s products and services, including the actual servicing of the contracts as well as the regulatory environment in which the Company operates all have similar characteristics. Each of our individual dealerships is similar in nature and only engages in the selling and financing of used vehicles. All individual dealerships have similar operating characteristics. As such, individual dealerships have been aggregated into one Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. Significant estimates include, but are not Concentration of Risk The Company provides financing in connection with the sale of substantially all of its vehicles. These sales are made primarily to customers residing in Alabama, Arkansas, Georgia, Illinois, Kentucky, Mississippi, Missouri, Oklahoma, Tennessee, and Texas, with approximately 29% As of April 30, 2020, one September 2022. Restrictions on Distributions/Dividends The Company’s revolving credit facilities generally restrict distributions by the Company to its shareholders. The distribution limitations under the credit facilities allow the Company to repurchase the Company’s stock so long as either: (a) the aggregate amount of such repurchases after September 30, 2019 not $50 20% not 75% twelve 12.5% Cash Equivalents The Company considers all highly liquid instruments purchased with original maturities of three Finance Receivables, Repossessions and Charge-offs and Allowance for Credit Losses The Company originates installment sale contracts from the sale of used vehicles at its dealerships. These installment sale contracts carry an average interest rate of approximately 16.4% not not $3.1 April 30, 2020 $2.3 April 30, 2019), . one not may 76% April 30, 2020, 6.2% 30 2.9% April 30, 2019. Substantially all of the Company’s automobile contracts involve contracts made to individuals with impaired or limited credit histories, or higher debt-to-income ratios than permitted by traditional lenders. Contracts made with buyers who are restricted in their ability to obtain financing from traditional lenders generally entail a higher risk of delinquency, default and repossession, and higher losses than contracts made with buyers with better credit. At the time of originating a finance agreement, the Company requires customers to meet certain criteria that demonstrate their intent and ability to pay for the financed principle and interest on the vehicle they are purchasing. However, the Company recognizes that their customer base is at a higher risk of default given their impaired or limited credit histories. The Company strives to keep its delinquency percentages low, and not three not Periodically, the Company enters into contract modifications with its customers to extend or modify the payment terms. The Company only enters into a contract modification or extension if it believes such action will increase the amount of monies the Company will ultimately realize on the customer’s account and will increase the likelihood of the customer being able to pay off the vehicle contract. At the time of modification, the Company expects to collect amounts due including accrued interest at the contractual interest rate for the period of delay. No third The Company takes steps to repossess a vehicle when the customer becomes delinquent in his or her payments and management determines that timely collection of future payments is not not 60 The Company maintains an allowance for credit losses on an aggregate basis, as opposed to a contract-by-contract basis, at an amount it considers sufficient to cover estimated losses inherent in the portfolio at the balance sheet date in the collection of its finance receivables currently outstanding. The Company accrues an estimated loss for the amount it believes will not 19 not · The number of units repossessed or charged-off as a percentage of total units financed over specific historical periods of time from one five · The average net repossession and charge-off loss per unit during the last eighteen 50% 10 11 13 · The timing of repossession and charge-off losses relative to the date of sale (i.e., how long it takes for a repossession or charge-off to occur) for repossessions and charge-offs occurring during the last eighteen A point estimate is produced by this analysis which is then supplemented by a review of static pools coupled with any positive or negative subjective factors to arrive at an overall reserve amount that management considers to be a reasonable estimate of losses inherent in the portfolio at the balance sheet date that will be realized via actual charge-offs in the future. While challenging economic conditions can negatively impact credit losses, the effectiveness of the execution of internal policies and procedures within the collections area and the competitive environment on the lending side have historically had a more significant effect on collection results than macro-economic issues. In the first 2020, 25.0% 24.5% fourth 2020, 19 6.2% 2.9% 24.5% 26.5%. $9.1 $7.0 $1.02 19 In most states, the Company offers retail customers who finance their vehicle the option of purchasing a payment protection plan product as an add-on to the installment sale contract. This product contractually obligates the Company to cancel the remaining principal outstanding for any contract where the retail customer has totaled the vehicle, as defined by the product, or the vehicle has been stolen. The Company periodically evaluates anticipated losses to ensure that if anticipated losses exceed deferred payment protection plan revenues, an additional liability is recorded for such difference. No April 30, 2020 2019. Inventory Inventory consists of used vehicles and is valued at the lower of cost or net realizable value on a specific identification basis. Vehicle reconditioning costs are capitalized as a component of inventory. Repossessed vehicles and trade-in vehicles are recorded at fair value, which approximates wholesale value. The cost of used vehicles sold is determined using the specific identification method. Goodwill Goodwill reflects the excess of purchase price over the fair value of specifically identified net assets purchased. Goodwill and intangible assets deemed to have indefinite lives are not no 2020 2019. Property and Equipment Property and equipment are stated at cost. Expenditures for additions, remodels and improvements are capitalized. Costs of repairs and maintenance are expensed as incurred. Leasehold improvements are amortized over the shorter of the estimated life of the improvement or the lease period. The lease period includes the primary lease term plus any extensions that are reasonably assured. Depreciation is computed principally using the straight-line method generally over the following estimated useful lives: Furniture, fixtures and equipment (years) 3 to 7 Leasehold improvements 5 to 15 Buildings and improvements 18 to 39 Property and equipment are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not Cash Overdraft As checks are presented for payment from the Company’s primary disbursement bank account, monies are automatically drawn against cash collections for the day and, if necessary, are drawn against one not Deferred Sales Tax Deferred sales tax represents a sales tax liability of the Company for vehicles sold on an installment basis in the states of Alabama and Texas. Under Alabama and Texas law, for vehicles sold on an installment basis, the related sales tax is due as the payments are collected from the customer, rather than at the time of sale. Deferred sales tax liabilities are reflected in accrued liabilities on the Company’s Consolidated Balance Sheets. Income Taxes Income taxes are accounted for under the liability method. Under this method, deferred income tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates expected to apply in the years in which these differences are expected to be recovered or settled. On December 22, 2017, April 30, 2018, 2018. 740, Income Taxes, December 22, 2017, 740 35% 21%, January 1, 2018. 30.4% 2018 21% third 2018, $8.1 Occasionally, the Company is audited by taxing authorities. These audits could result in proposed assessments of additional taxes. The Company believes that its tax positions comply in all material respects with applicable tax law; however, tax law is subject to interpretation, and interpretations by taxing authorities could be different from those of the Company, which could result in the imposition of additional taxes. The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not not 50 The Company is subject to income taxes in the U.S. federal jurisdiction and various state jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. With few exceptions, the Company is no 2017. The Company’s policy is to recognize accrued interest related to unrecognized tax benefits in interest expense and penalties in operating expenses. The Company had no April 30, 2020 2019, Revenue Recognition Revenues are generated principally from the sale of used vehicles, which in most cases includes a service contract and a payment protection plan product, as well as interest income and late fees earned on finance receivables. Revenues are net of taxes collected from customers and remitted to government agencies. Cost of vehicle sales include costs incurred by the Company to prepare the vehicle for sale including license and title costs, gasoline, transport services and repairs. The Company’s performance obligations are clearly identifiable, and the transaction price is explicitly stated on the customers’ contracts. The Company collects payments in accordance with the terms of the customers’ accounts, ranging between 18 48 78’s” Sales consist of the following for the years ended April 30, 2020, 2019 2018: Years Ended April 30, (In thousands) 2020 2019 2018 Sales – used autos $ 567,816 $ 506,184 $ 462,956 Wholesales – third party 28,966 27,376 25,638 Service contract sales 31,480 30,243 28,482 Payment protection plan revenue 24,730 22,705 20,452 Total $ 652,992 $ 586,508 $ 537,528 At April 30, 2020 2019, 90 $3.1 $1.2 $2.3 $1.9 $1.9 2020, 2019 2018, During the years ended April 30, 2020 2019, $9.4 $9.1 April 30, 2019 2018, Advertising Costs Advertising costs are expensed as incurred and consist principally of radio, print media and digital marketing costs. Advertising costs amounted to $3.1 $3.1 $3.8 April 30, 2020, 2019 2018, Employee Benefit Plans The Company has 401 50% 6% $769,000, $523,000, $465,000 April 30, 2020, 2019 2018, The Company offers employees the right to purchase common shares at a 15% 2006 October 2006. 15% 2020, 2019 2018 not 200,000 139,763 April 30, 2020. Earnings per Share Basic earnings per share are computed by dividing net income attributable to common stockholders by the average number of common shares outstanding during the period. Diluted earnings per share are computed by dividing net income attributable to common stockholders by the average number of common shares outstanding during the period plus dilutive common stock equivalents. The calculation of diluted earnings per share takes into consideration the potentially dilutive effect of common stock equivalents, such as outstanding stock options and non-vested restricted stock, which if exercised or converted into common stock would then share in the earnings of the Company. In computing diluted earnings per share, the Company utilizes the treasury stock method and anti-dilutive securities are excluded. Stock-Based Compensation The Company recognizes the cost of employee services received in exchange for awards of equity instruments, such as stock options and restricted stock, based on the fair value of those awards at the date of grant over the requisite service period. The Company uses the Black-Scholes option pricing model to determine the fair value of stock option awards. The Company may If an award contains a performance condition, expense is recognized only for those shares for which it is considered reasonably probable as of the current period end that the performance condition will be met. In March 2016, 2016 09, Improvements to Employee Share-Based Payment Accounting May 1, 2017. $1.7 2018. not not Treasury Stock The Company purchased 182,805, 378,627, 979,040 $16.0 $26.6 $42.3 April 30, 2020, 2019 2018, may 10,000 14,000 Facility Leases The Company’s leases primarily consist of operating leases related to retail stores, office space, land. For more information on financing obligations see Note . The initial term for real property leases is typically 3 to 10 years. Most leases include one 3 to 10 years or more. include options to renew (or terminate) in lease term, and as part of right-of-use asset and lease liabilit , when it is reasonably certain that . April 30, 2020 15.0 The ROU asset and the related lease liabilit are initially measured at the present value of future lease payments over the lease term. As most leases do not rate, . April 30, 2020 4.35%. The Company includes variable lease payments in the initial measurement of ROU assets and lease liabilities only to the extent they depend on an index or rate. Changes in such indices or rates are accounted for in the period the change occurs, and do not also responsible for payment of certain real estate taxes, and other expenses on leases. These amounts are generally considered to be variable and are not on-lease components generally account for separately from lease components. not Recent Accounting Pronouncements Occasionally, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies which the Company will adopt as of the specified effective date. Unless otherwise discussed, the Company believes the implementation of recently issued standards which are not not Adopted in Current Period Leases February 2016, 2016 02, Leases 12 2016 02 December 15, 2018, May 1, 2019 $34.5 not Effective in Future Periods Credit Losses. June 2016, 2016 13, Financial Instruments — Credit Losses 326 2016 13 2016 13 December 15, 2019, May 1, 2020. not Cloud Computing Arrangement. August 2018, 2018 15, Intangibles – Goodwill and Other – Internal-Use Software 350 40 2018 15 2018 15 December 15, 2019, not Reference Rate Reform. March 2020, 2020 04, March 12, 2020 December 31, 2022. not |
