Significant Accounting Policies (Policies)

3 Months Ended

Dec. 31, 2016

Consolidation, Policy [Policy Text Block]

Consolidated Financial Statements

The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial statements and are in the form prescribed by Article

of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for annual financial statements. The information included in this Form

-Q should be read in conjunction with Item

– “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and notes thereto included in the Form

-K

. The accompanying consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the Company’s financial results. Interim results are not necessarily indicative of results for any other interim period or for a full fiscal year. The Company reports its results of operations on a fiscal year ending

September

30.

The accompanying consolidated financial statements include all the accounts of the holding company’s wholly owned subsidiaries, Vitamin Cottage Natural Food Markets, Inc. (the operating company) and Vitamin Cottage Two Ltd. Liability Company

(VC2).

All significant intercompany balances and transactions have been eliminated in consolidation.

The Company has

one

reporting segment: natural and organic retail stores. Sales from the Company’s natural and organic retail stores are derived from sales of the following product categories, which are presented as a percentage of sales for the

three

months ended

December

31,

2016

and

2015,

as follows:

	Three months ended December 31 ,
	201 6			201 5
Grocery		66.0	%		66.3
Dietary supplements		22.0			21.9
Other		12.0			11.8
		100.0	%		100.0

Use of Estimates, Policy [Policy Text Block]

Use of

Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities (including the fair value of assets acquired and liabilities assumed in a business combination), the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management reviews its estimates on an ongoing basis, including those related to allowances for self-insurance reserves, valuation of inventories, useful lives of property and equipment for depreciation and amortization, valuation allowances for deferred tax assets and litigation based on currently available information. Changes in facts and circumstances

may

result in revised estimates and actual results could differ from those estimates.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

March

2016,

the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU)

2016

09,

“Improvements to Employee Share-Based Payment Accounting,” Topic

718,

“Compensation-Stock Compensation” (ASU

2016

09).

ASU

2016

includes provisions intended to simplify various aspects related to how share-based payments are accounted for and presented in the financial statements. The main provision requires all excess tax benefits and tax deficiencies to be recognized as income tax benefit or expense in the statement of income. The tax effects of exercised or vested awards should be treated as discrete items in the reporting period in which they occur. The ASU also allows an entity to make an entity-wide election to either estimate the number of awards that are expected to vest (current GAAP) or account for forfeitures when they occur. Other provisions in ASU

2016

permit tax withholding up to the maximum statutory tax rates in the applicable jurisdictions. Under ASU

2016

excess tax benefits must be classified along with other income tax cash flows as an operating activity. The provisions of ASU

2016

are effective for the Company’s

first

quarter of the fiscal year ending

September

30,

2018.

Early adoption is permitted. The Company is currently evaluating the impact that the adoption of ASU

2016

will have on its consolidated financial statements.

February

2016,

the FASB issued ASU

2016

02,

“Leases,” Topic

842,

“Leases” (ASU

2016

02).

ASU

2016

intends to improve financial reporting about leasing transactions. The ASU will require organizations that lease assets to recognize on the balance sheet assets and liabilities for the rights and obligations created by those leases. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or capital. Operating leases will result in straight-line expense while capital leases will result in a front-loaded expense pattern. Classification will be based on criteria that are largely similar to those applied in current lease accounting, but without explicit bright lines. The amendments also require certain quantitative and qualitative disclosures. ASU

2016

is effective for fiscal years beginning after

December

15,

2018

and interim periods within those years. The provisions of ASU

2016

are effective for the Company’s

first

quarter of the fiscal year ending

September

30,

2020.

Early adoption is permitted. The new standard must be adopted using a modified retrospective transition, and provides for certain practical expedients. Transition will require application of the new guidance at the beginning of the earliest comparative period presented. The Company is currently evaluating the impact that the adoption of ASU

2016

will have on its consolidated financial statements but expects it to have a significant impact on its balance sheet due to the number of operating leases to which the Company is a party.

July

2015,

the FASB issued ASU

2015

11,

“Simplifying the Measurement of Inventory,” Topic

330,

“Inventory” (ASU

2015

11).

The amendments in ASU

2015

11,

which apply to inventory that is measured using any method other than the last-in,

first

-out (LIFO) or retail inventory method, require that entities measure inventory at the lower of cost and net realizable value. The amendments in ASU

2015

should be applied on a prospective basis. ASU

2015

is effective for fiscal years beginning after

December

15,

2016

and interim periods within those years. The provisions of ASU

2015

are effective for the Company’s

first

quarter of the fiscal year ending

September

30,

2018.

The Company does not expect the adoption of these provisions to have a significant impact on the Company’s consolidated financial statements.

May

2014,

the FASB issued ASU

2014

09,

“Revenue from Contracts with Customers,” Topic

606,

“Revenue from Contracts with Customers” (ASU

2014

09).

ASU

2014

provides guidance for revenue recognition and will replace most existing revenue recognition guidance in GAAP when it becomes effective. ASU

2014

09’s

core principle is that a company will 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 for the transfer of those goods or services. ASU

2014

permits the use of either the retrospective or cumulative effect transition method. In

July

2015,

the FASB issued ASU

2015

14,

“Revenue from Contracts with Customers – Deferral of the Effective Date.” The FASB approved the deferral of ASU

2014

09,

by extending the new revenue recognition standard’s mandatory effective date by

one

year and permitting public companies to apply the new revenue standard to annual reporting periods beginning after

December

15,

2017.

However, earlier adoption is permitted only for annual reporting periods beginning after

December

15,

2016.

The guidance in ASU

2014

will be effective for the Company in the

first

quarter of the fiscal year ending

September

30,

2019.

The Company is currently evaluating the impact that the adoption of ASU

2014

will have on its consolidated financial statements.