Significant Accounting Policies (Policies)

12 Months Ended

Apr. 30, 2017

Accounting Policies [Abstract]

Trade and Other Accounts Receivable, Policy [Policy Text Block]

a)

Accounts receivable: Accounts receivable are carried on a gross basis, with

no

discounting, less the allowance for doubtful accounts. Management estimates the allowance for doubtful accounts based on existing economic conditions, the financial conditions of the customers, and the amount and the age of past due accounts. Receivables are considered past due if full payment is

not

received by the contractual due date. Past due accounts are generally written off against the allowance for doubtful accounts only after all collection attempts have been exhausted. Allowance for doubtful accounts are calculated on the historical write-off of doubtful accounts of the individual subsidiaries. Invoices are generally considered a doubtful account if

no

payment has been made in the past

90

days. We review these policies on a quarterly basis, and based on these reviews, we believe we maintain adequate reserves. At

April 30,

201

7

and

2016,

the allowance for doubtful accounts was

$112

and

$81

respectively.

Use of Estimates, Policy [Policy Text Block]

b)

Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Future events and their effects cannot be determined with certainty. Therefore, the determination of estimates requires the exercise of judgment. Actual results could differ from those estimates, and any such differences

may

be material to our financial statements. Significant estimates include assumptions about collection of accounts receivable, the valuation and recognition of stock-based compensation expense, valuation for deferred tax assets and useful life of fixed assets.

Inventory, Policy [Policy Text Block]

c)

Inventories: Inventories are priced at the lower of cost, determined on a

first

-in,

first

-out basis, or market. Inventories include material, labor and factory overhead required in the production of our products.

Inventory obsolescence is examined on a regular basis. When determining our estimate of obsolescence we consider inventory that has been inactive for

five

years or longer and the probability of using that inventory in future production. The obsolete inventory generally consists of Falcon and Learjet parts and electrical components.

  At

April 30, 2017

and

2016,

the estimate of obsolete inventory was

$1,177

and

$1,161

respectively.

Property, Plant and Equipment, Policy [Policy Text Block]

d)

Property and Related Depreciation: Machinery and equipment are recorded at cost and depreciated over their estimated useful lives. Depreciation is provided on a straight-line basis. The lives used for the significant items within each property classification range from

3

to

39

years.

Maintenance and repairs are charged to expense as incurred. The cost and accumulated depreciation of assets retired are removed from the accounts and any resulting gains or losses are reflected as income or expense.

During fiscal

2016

the Company 

sold

one

aircraft.  Proceeds from the sale totaled

$959.

  The company realized a gain of

$732

on the sale.

Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block]

e)

Long-Lived Assets: The Company accounts for its long-lived assets in accordance with ASC Topic

360

-

10,

formerly SFAS

No.

144

"Accounting for the Impairment or Disposal of Long-Lived Assets." ASC Topic

360

-

10

requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the historical cost carrying value of an asset

may

no

longer be appropriate. The Company assesses recoverability of the carrying value of an asset by estimating the future net cash flows expected to result from the asset, including eventual disposition. If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset's carrying value and fair value or disposable value.

Other Assets Policy [Policy Text Block]

f)	Other Assets: Our other asset account includes assets of $5,500 related to the Kansas Expanded Lottery Act Management Contract privilege fee, $ 5,012 of gaming equipment we were required to pay for ownership by the State of Kansas Lottery, and JET autopilot intellectual property of $1,417, and miscellaneous other assets of $1,457.   BHCMC expects the $5,500 privilege fee to have a value over the remaining life of the Management Contract with the State of Kansas which will end in December 2024.  There is no assurance of the Management Contract renewal.  The Managers Certificate asset for use of gaming equipment is being amortized over a period of three years based on the estimated useful life of gaming equipment.  The JET intellectual property is being amortized over a period of fifteen years.
		Other assets net values are as follows:

(dollars in thousands)	2017		2016
Privilege fee	$	5,500	$	5,500
Less amortized costs		2,256		1,833
Privilege fee balance	$	3,244	$	3,667
Intangible gaming equipment	$	5,012	$	4,576
Less amortized costs		3,782		2,974
Intangible gaming equipment balance	$	1,230	$	1,602
JET autopilot intellectual property	$	1,417	$	1,417
Less amortized costs		866		772
JET autopilot balance	$	551	$	645

Supplemental Type Certificates [Policy Text Block]

g) Supplemental Type Certificates: Supplemental Type Certificates (STCs) are authorizations granted by the Federal Aviation Administration (FAA) for specific modification of a certain aircraft. The STC authorizes us to perform modifications, installations, and assemblies on applicable customer-owned aircraft. Costs incurred to obtain STCs are capitalized and subsequently amortized over seven years. The legal life of an STC is indefinite. We believe we have enough future sales to fully amortize our STC development costs. Consultant costs, as shown below, include costs of engineering, legal and aircraft specialists. STC capitalized costs are as follows:

(dollars in thousands)	2017		2016
Direct labor	$	2,199	$	2,044
Direct materials		2,866		2,638
Consultant costs		1,922		1,922
Overhead		3,712		3,426
		10,699		10,030
Less-amortized costs		4,345		3,549
STC balance	$	6,354	$	6,481

Revenue Recognition, Policy [Policy Text Block]

h)

Revenue Recognition: Generally, we perform aircraft modifications under fixed-price contracts. Revenue from fixed-price contracts are recognized on the percentage-of-completion method, measured by the direct labor incurred compared to total estimated direct labor and material costs. Each quarter our management reviews the progress and performance of our significant contracts. Based on this analysis, any adjustment to sales, cost of sales and/or profit is recognized as necessary in the period they are earned. Changes in estimates of contract sales, cost of sales and profits are recognized using a cumulative catch-up, which is recognized in the current period of the cumulative effect of the change on current or prior periods. Revenue for off-the-shelf items and aircraft sales is recognized on the date of sale.

Revenue from product sales is recognized when shipped. Payment for these Avionics products is due within

30

days of the invoice date after shipment. Revenue from Gaming Management and other Corporate/Professional Services is recognized as the service is rendered and invoiced. Payments for these service invoices are usually received within

30

days.

In regard to warranties and returns, our products are special order and are

not

suitable for return. Our products are unique upon installation and tested prior to their release to the customer and acceptance by the customer. In the rare event of a warranty claim, the claim is processed through the normal course of business and

may

include additional charges to the customer. In our opinion, any future warranty work would

not

be material to the financial statements.

Gaming revenue is the gross gaming win as reported by the Kansas Lottery casino reporting systems, less the mandated payments by and for the State of Kansas. Electronic games-slots and table games revenue is the aggregate of gaming wins and losses. Liabilities are recognized for chips and "ticket-in, ticket-out" coupons in the customers' possession, and for accruals related to anticipated payout of progressive jackpots. Progressive gaming machines, which contain base jackpots that increase at a progressive rate based on the number of coins played, are deducted from revenue as the value of jackpots increase. Food, beverage, and other revenue is recorded when the service is received and paid for.

Slot Machine Jackpots [Policy Text Block]

i)

Slot Machine Jackpots: If the casino is

not

required to make payment of the jackpot (i.e. the incremental amount on a progressive machine) due to legal requirements, the jackpot is accrued as the obligation becomes unavoidable. This liability is accrued over the time period in which the incremental progressive jackpot amount is generated with a related reduction in casino revenue.

No

liability is accrued with respect to the base jackpot.

Advanced Payments and Billings in Excess of Costs Incurred [Policy Text Block]

j)

Advanced Payments and Billings in Excess of Costs Incurred: We receive advances, performance-based payments and progress payment from customers which

may

exceed costs incurred on certain contracts. We classify advance payments and billings in excess of costs incurred, other than those reflected as a reduction of contracts in process, as current liabilities.

Earnings Per Share, Policy [Policy Text Block]

k) Earnings Per Share: Earnings per common share is based on the weighted average number of common shares outstanding during the year.

The computation of the Company basic and diluted earnings per common share is as follows:

(in thousands, except per share data)	2017		2016
Net income attributable to Butler National Corporation	$	1,534	$	24
Weighted average common shares outstanding		63,455,883		62,263,404
Dilutive effect of non-qualified stock option plans		-		-
Weighted average common shares outstanding, assuming dilution		63,455,883		62,263,404
Potential common shares if all options were exercised and shares issued		63,455,883		62,263,404
Basic earnings per common share	$	0.02	$	0.00
Diluted earnings per common share	$	0.02	$	0.00

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

l) Stock-based Compensation: The Company accounts for stock-based compensation under ASC Topic 505 - 50, formerly SFAS No. 123R, " Share-Based Payment " and SFAS No. 148, " Accounting for Stock-Based Compensation - Transition and Disclosure - An amendment to SFAS No. 123 ." These standards define a fair value based method of accounting for stock-based compensation. In accordance with SFAS Nos. 123R and 148, the cost of stock-based compensation is measured at the grant date based on the value of the award and is recognized over the vesting period. The value of the stock-based award is determined using the Black-Scholes option-pricing model, whereby compensation cost is the excess of the fair value of the award as determined by the pricing model at the grant date or other measurement date over the amount that must be paid to acquire the stock. The resulting amount is charged to expense on the straight-line basis over the period in which the Company expects to receive the benefit, which is generally the vesting period.

Income Tax, Policy [Policy Text Block]

m)

Income Taxes: Amounts provided for income tax expense are based on income reported for financial statement purposes and do

not

necessarily represent amounts currently payable under tax laws. Deferred taxes, which arise principally from temporary differences between the period in which certain income and expense items are recognized for financial reporting purposes and the period in which they affect taxable income, are included in the amounts provided for income taxes. Under this method, the computation of deferred tax assets and liabilities give recognition to enacted tax rates in effect in the year the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to amounts that we expect to realize.

Cash and Cash Equivalents, Policy [Policy Text Block]

n)

Cash and Cash Equivalents: Cash and cash equivalents consist primarily of cash and investments in a money market fund. We consider all highly liquid investments with an original maturity of

three

months or less to be cash equivalents. We maintain cash in bank deposit accounts that, at times,

may

exceed federally insured limits. At

April 30,

201

7

and

2016,

we had

$2,312

and

$3,546,

respectively in bank deposits that exceeded the federally insured limits.

Concentration Risk, Credit Risk, Policy [Policy Text Block]

o)

Concentration of Credit Risk: We extend credit to customers based on an evaluation of their financial condition and collateral is

not

required. We perform ongoing credit evaluations of our customers and maintain an allowance for doubtful accounts.

Research and Development Expense, Policy [Policy Text Block]

p)

Research and Development: We invested in research and development activities. The amount invested in the year ended

April 30,

201

7

and

2016

was

$1,479

and

$1,838

respectively.

New Accounting Pronouncements, Policy [Policy Text Block]

q)

Recent Accounting Pronouncements: We do

not

believe there are any recently issued accounting standards that have

not

yet been adopted that will have a material impact on the Company's financial statements

.

Reclassification, Policy [Policy Text Block]

r)

Reclassifications: Certain reclassifications within the financial statement captions have been made to maintain consistency in presentation between years. These reclassifications have

no

impact on the reported results of operations.