Significant Accounting Policies [Text Block] | NOTE 2: SIGNIFICANT ACCOUNTING POLICIES The consolidated financial statements are prepared according to United States generally accepted accounting principles (“U.S. GAAP”). a. Use of estimates: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions. The Company’s management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. b. Financial statements in U.S. dollars: Most of the Company’s revenues are generated in U.S. dollars (“dollar”). In addition, a substantial portion of the Company’s costs are incurred in dollars. The Company’s management believes that the dollar is the currency of the primary economic environment in which the Company operates. Thus, the functional and reporting currency of the Company is the dollar. Monetary accounts maintained in currencies other than the dollar are remeasured into dollars in accordance with ASC No. 830 30, The financial statements of the Company’s subsidiary – DSP Group Technologies GmbH whose functional currency is in Euro, has been translated into dollars. All amounts on the balance sheets have been translated into the dollar using the exchange rates in effect on the relevant balance sheet dates. All amounts in the consolidated statements of operations have been translated into the dollar using the average exchange rate for the relevant periods. The resulting translation adjustments are reported as a component of accumulated other comprehensive income (loss) in changes in stockholders’ equity. Accumulated other comprehensive loss related to foreign currency translation adjustments, net amounted to $305 $379 December 31, 2016 2015, c. Principles of consolidation: The consolidated financial statements include the accounts of the Company. Intercompany transactions and balances have been eliminated in consolidation. d. Cash equivalents: Cash equivalents are short-term highly liquid investments, which are readily convertible to cash with original maturity of three e. Restricted deposits: Restricted deposits include deposits which are used as security for derivative instruments and for one f. Short-term deposits: Bank deposits with original maturities of more than three one g. Marketable securities: The Company accounts for investments in debt securities in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No. 320 10, The Company classified all of its investments in marketable securities as available for sale. Available-for-sale securities are carried at fair value, with the unrealized gains and losses, reported in other comprehensive income (loss) using the specific identification method. Unrealized losses determined to be other-than-temporary are recorded as a financial expense. The amortized cost of marketable securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization is included in financial income, net. Interest and dividends on securities are included in financial income, net. The marketable securities are periodically reviewed for impairment. If management concludes that any of these investments are impaired, management determines whether such impairment is other-than-temporary. Factors considered in making such a determination include the duration and severity of the impairment, the reason for the decline in value and the potential recovery period, and the Company’s intent to sell, or whether it is more likely than not that the Company will be required to sell the investment before recovery of cost basis. For debt securities, only the decline attributable to deteriorating credit of an-other-than-temporary impairment is recorded in the consolidated statement of operations, unless the Company intends, or more likely than not it will be forced, to sell the security. During the years ended December 31, 2016, 2015 2014, 3). h. Fair value of financial instruments: Cash and cash equivalents, restricted deposits, short-term deposits, trade receivables, trade payables and accrued liabilities approximate fair value due to short term maturities of these instruments. Marketable securities and derivative instruments are carried at fair value. See Note 3 Fair value is an exit price, representing the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. A three Level 1 Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 Include other inputs that are directly or indirectly observable in the marketplace. Level 3 Unobservable inputs which are supported by little or no market activity. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. i. Inventories: Inventories are stated at the lower of cost or market value. Inventory reserves are provided to cover risks arising from slow-moving items or technological obsolescence. The Company and its subsidiaries periodically evaluate the quantities on hand relative to historical, current and projected sales volume. Based on this evaluation, an impairment charge is recorded when required to write-down inventory to its market value. Cost is determined as follows: Work in progress and finished products- on the basis of raw materials and manufacturing costs on an average basis. The Company regularly evaluates the ability to realize the value of inventory based on a combination of factors, including the following: historical usage rates and forecasted sales according to outstanding backlogs. Purchasing requirements and alternative usage are explored within these processes to mitigate inventory exposure. When recorded, the reserves are intended to reduce the carrying value of inventory to its net realizable value. Inventory of $9,748, $11,453 $15,635 December 31, 2016, 2015 2014, $571, $670 $505 may j. Property and equipment, net: Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, at the following annual rates: % Computers and equipment 20 - 33 Office furniture and equipment 6 - 15 Leasehold improvements ”see below” Leasehold improvements are depreciated on a straight-line basis over the shorter of the lease term (including the extension option held by the Company and intended to be exercised) and the expected life of the improvement. Property and equipment of the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may During the years ended December 31, 2016, 2015 2014, no The Company accounts for costs of computer software developed or obtained for internal use in accordance with FASB ASC No. 350 40, 350 40 2016, 2015 2014, $0, $1,086 $128, three k. Goodwill and other intangible assets: The goodwill and certain other purchased intangible assets have been recorded as a result of the BoneTone acquisition and the acquisition of a private company in Asia. Goodwill represents the excess of the purchase price in a business combination over the fair value of net tangible and intangible assets acquired. Goodwill is not amortized, but rather is subject to an annual impairment test. ASC 350 two first second second 350 first two Alternatively, ASC 350 first The Company performs an annual impairment test on December 31 The Company’s reporting units are consistent with the reportable segments identified in Note 17. Fair value is determined using discounted cash flows, market multiples and market capitalization. Significant estimates used in the methodologies include estimates of future cash-flows, future short-term and long-term growth rates, weighted average cost of capital and market multiples for the reporting unit. For the fiscal year ended December 31, 2016, 2015 2014, no Intangible assets that are not considered to have an indefinite useful life are amortized using the straight-line basis over their estimated useful lives, which range from 3 7.3 may If such asset is considered to be impaired, the impairment to be recognized is measured as the difference between the carrying amount of the assets and the fair value of the impaired asset. During the fiscal year ended December 31, 2016, 2015 2014, l. Severance pay: DSP Group Ltd., the Company’s Israeli subsidiary (“DSP Israel”), has a liability for severance pay pursuant to Israeli law, based on the most recent monthly salary of its employees multiplied by the number of years of employment as of the balance sheet date for such employees. DSP Israel’s liability is fully provided for by monthly accrual and deposits with severance pay funds and insurance policies. The deposited funds include profits accumulated up to the balance sheet date. The deposited funds may The Company’s Korean subsidiary has a statutory liability for severance pay pursuant to Korean law based on the most recent monthly salary of its employees multiplied by the number of years of employment as of the balance sheet date for such employees. This Korean subsidiary’s liability is fully accrued. Severance expenses for the years ended December 31, 2016, 2015 2014, $1,582, $1,498 $1,568, m. Revenue recognition: The Company generates its revenues from sales of products. The Company sells its products through a direct sales force and through a network of distributors. Product sales are recognized when persuasive evidence of an agreement exists, delivery of the product has occurred, the fee is fixed or determinable, collectability is reasonably assured, and no significant obligations remain. Persuasive evidence of an arrangement exists - Delivery has occurred Separately, the Company has consignment inventory which is held for specific customers at the customers’ premises. It recognizes revenue on the consigned inventory when the customer consumes the products from the warehouse, as that is when per the consignment inventory agreements, risk and title passes to the customer and the products are deemed delivered to the customer. Price is fixed or determinable four Collectability of the related receivable is reasonably assured With respect to product sales through the Company’s distributors, such product revenues are deferred until the distributors resell the Company’s products to the end-customers (“sell through”) and recognized based upon receipt of reports from the distributors, provided all other revenue recognition criteria as discussed above are met. The Company views its distributor arrangements as that of consignment because, although the actual sales are conducted through the distributors and legally title for the products passes to the distributors upon delivery to the distributors, in substance inventory is simply being transferred to another location for sale to the end-user customers as the Company’s primary business relationships and responsibilities are directly with the end-user customers. Because the Company views its arrangements with its distributors as that of consignment relationships, delivery of goods is not deemed to have occurred solely upon delivery to the distributors. Therefore, the Company recognizes revenues from distributors under the “sell-through” method. As a result, revenue is deferred at the time of shipment to the distributors and is recognized only when the distributors sell the products to the end-user customers. n. Warranty: The Company warrants its products against errors, defects and bugs for generally one may December 31, 2016, 2015 2014. o. Research and development costs, net: Research and development costs, net of grants received, are charged to the consolidated statement of operations as incurred. p. Government grants: Government grants received by the Company’s Israeli subsidiary relating to categories of operating expenditures are credited to the consolidated statements of income during the period in which the expenditure to which they relate is charged. Royalty and non-royalty-bearing grants from the Israeli Innovation Authority ("IIA") (formerly known as Office of the Chief Scientist) for funding certain approved research and development projects are recognized at the time when the Company’s Israeli subsidiary is entitled to such grants, on the basis of the related costs incurred, and are included as a deduction from research and development expenses, net. The Company recorded grants in the amount of $2,687, $2,738 $3,002 December 31, 2016 2015 2014, The Company’s Israeli subsidiary is obligated to pay royalties amounting to 5% may may third may may six three third q. Equity-based compensation: At December 31, 2016, two may three may one 13. The Company accounts for equity-based compensation in accordance with FASB ASC No. 718, 718”). 718 The Company recognizes compensation expenses for the value of its awards granted based on the accelerated attribution method, rather than a straight-line method over the requisite service period of each of the awards, net of estimated forfeitures. FASB ASC No. 718 The Company selected the lattice option pricing model as the most appropriate fair value method for its equity-based awards and values options and stock appreciation rights (SARs) based on the market value of the underlying shares on the date of grant. The option-pricing model requires a number of assumptions, of which the most significant are the expected stock price volatility and the expected term of the equity-based award. Expected volatility is calculated based upon actual historical stock price movements. The expected term of the equity-based award granted is based upon historical experience and represents the period of time that the award granted is expected to be outstanding. The risk-free interest rate is based on the yield from U.S. treasury bonds with an equivalent term. The Company has historically not paid dividends and has no foreseeable plans to pay dividends. The Company granted stock appreciation rights (SARs) until 2012. 2013, . r. Basic and diluted income (loss) per share: Basic net income (loss) per share is computed based on the weighted average number of shares of common stock outstanding during the year. Diluted net income (loss) per share further includes the dilutive effect of stock options, SARs and RSUs outstanding during the year, all in accordance with FASB ASC No. 260, The total weighted average number of shares related to the outstanding stock options, SARs and RSUs excluded from the calculation of diluted net income per share due to their anti-dilutive effect was 334,833, 403,632 1,811,687 December 31, 2016, 2015 2014, s. Income taxes: The Company accounts for income taxes in accordance with FASB ASC No. 740, Deferred tax liabilities and assets are classified as non-current based on the adopting of Accounting Standards Update (“ASU”) 2015 17, 2015 17, 2015 17 for all period presented. The Company accounts for uncertain tax positions in accordance with ASC 740, two first second 50% The Company includes interest related to tax issues as part of income tax expense in its consolidated financial statements. The Company records any applicable penalties related to tax issues within the income tax provision. t. Concentrations of credit risk: Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, restricted deposits, short-term deposits, trade receivables and marketable securities. The majority of cash and cash equivalents and short-term deposits of the Company are invested in dollar deposits with major U.S., European and Israeli banks. Deposits in U.S. banks may these deposits may The Company’s marketable securities consist of investment-grade corporate bonds and U.S. government-sponsored enterprise (“GSE”) securities. As of December 31, 2016, $100,615, $99,513, $1,102. A significant portion of the products of the Company is sold to original equipment manufacturers of consumer electronics products. The customers of the Company are located primarily in Japan, Hong Kong, Taiwan, China, Korea, Europe and the United States. The Company performs ongoing credit evaluations of their customers. A specific allowance for doubtful accounts is determined, based on management’s estimates and historical experience. Under certain circumstances, the Company may December 31, 2016 2015, The Company has no off-balance-sheet concentration of credit risk, except for certain derivative instruments as mentioned below. u. Derivative instruments: The Company accounts for derivatives and hedging based on FASB ASC No.815, ASC No. 815 requires companies to recognize all of their derivative instruments as either assets or liabilities on the balance sheet at fair value. For derivative instruments that are designated and qualify as a cash flows hedge (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Any gain or loss on a derivative instrument in excess of the cumulative change in the present value of future cash flows of the hedged item is recognized in current earnings during the period of change. To protect against the increase in value of forecasted foreign currency cash flows resulting from salary and rent payments in New Israeli Shekel (“NIS”) during the year, the Company instituted a foreign currency cash flow hedging program. The Company hedges portions of the anticipated payroll and rent of its Israeli facilities denominated in NIS for a period of one 12 The fair value of the outstanding derivative instruments at December 31, 2016 2015 Fair value of Derivative assets December 31, (liabilities) Balance sheet location 2016 2015 Foreign exchange forward contracts and put and call options Other accounts receivable and prepaid expenses (Accrued expenses and other accounts payable) $ 9 $ (36 ) Total $ 9 $ (36 ) The effect of derivative instruments in cash flow hedging transactions on income and other comprehensive income (“OCI”) for the years ended December 31, 2016, 2015 2014 Gains (losses) on derivatives Year ended December 31, 2016 2015 2014 Foreign exchange forward contracts and put and call options $ 45 $ (38 ) $ (1,180 ) Gains (losses) on derivatives reclassified Year ended December 31, Location 2016 2015 2014 Foreign exchange forward contracts and put and call options Operating expenses $ 1 $ (621 ) $ (562 ) As of December 31, 2016, $6,000. As of December 31, 2015, $12,850 $1,800, As of December 31, 2014, $16,575. v. Comprehensive income: The Company accounts for comprehensive income in accordance with FASB ASC No. 220, The following table summarizes the changes in accumulated balances of other comprehensive income (loss) for 2016: Unrealized gains (losses) on available- for-sale marketable securities Unrealized gains (losses) on Cash Flow Hedges Unrealized gains (losses) on components of defined benefit plans Unrealized gains (losses) on foreign currency translation Total January 1, 2016 $ (501 ) $ (35 ) $ (352 ) $ (379 ) $ (1,267 ) Other comprehensive income (loss) before reclassifications (617 ) 45 (117 ) 74 (615 ) Amounts reclassified from accumulated other comprehensive income (loss) 17 (1 ) 14 - 30 Net current period other comprehensive income (loss) (600 ) 44 (103 ) 74 (585 ) December 31, 2016 $ (1,101 ) $ 9 $ (455 ) $ (305 ) $ (1,852 ) The following table provides details about reclassifications out of accumulated other comprehensive income (loss) for 2016: Details about Accumulated Other Comprehensive Income (Loss) Components Amount Reclassified from Accumulated Other Comprehensive Income (Loss) Affected Line Item in the Statement of Income Losses on available-for-sale marketable securities $ 17 Financial income, net - Provision for income taxes 17 Total, net of income taxes Gains on cash flow hedges (1 ) Research and development - Sales and marketing - General and administrative (1 ) Total, before income taxes - Provision for income taxes (1 ) Total, net of income taxes Losses on components of defined benefit plans 7 Research and development 7 Sales and marketing 14 Total, before income taxes - Provision for income taxes 14 Total, net of income taxes Total reclassifications for the period 30 Total, net of income taxes w. Treasury stock at cost The Company repurchases its common stock from time to time on the open market or in other transactions and holds such shares as treasury stock. The Company presents the cost to repurchase treasury stock as a reduction of stockholders’ equity. From time to time, the Company reissues treasury stock under its employee stock purchase plan and equity incentive plans, upon purchases or exercises of equity awards under the plans. When treasury stock is reissued, the Company accounts for the re-issuance in accordance with ASC No. 505 30, x. Investment in other company: Investment in other company is stated at cost. The Company followed ASC 323, The Company’s investment in other company is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such investment may 325 20. December 31, 2014, December 31, 2015, $400 9). During the third 2016, 86% 100%. $500 9). y. Recently Issued Accounting Guidance: 1. In May 2014, 2014 09, 2014 09 Step 1: Step 2: Step 3: Step 4: Step 5: The guidance permits two (1) (2) The new standard will be effective for the Company beginning on January 1, 2018, January 1, 2017 January 1, 2018. The Company is still in the process of completing its assessment on the impact this guidance will have on its consolidated financial statements and related disclosures. The Company expects to complete its assessment process during 2017. In September 2015, 2015 16, 2015 16 2015 16, 2015 16 December 15, 2015, 2. In February 2016, 2016 02, December 15, 2018, 3. In August 2016, 2016 15 December 15, 2017 4. In March 2016, 2016 09, January 1, 2017. 5. In January 2017, 2017 04, 2 zero 2 December 15, 2019. January 1, 2017. 6. The FASB issued ASU 2016 13 December 15, 2019 December 15, 2018. first |