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2. Basis of Presentation and Significant Accounting Policies: Passur Network (Policies)
6 Months Ended
Apr. 30, 2017
Policies  
Passur Network

PASSUR Network

 

The PASSUR Network is comprised of PASSUR and SMLAT Systems, which include the direct and indirect production, shipping, and installation costs incurred for each PASSUR and SMLAT System, which are recorded at cost, net of accumulated depreciation. The Company capitalized $423,000 and $554,000, of PASSUR Network costs, for the three and six months ended April 30, 2017, respectively. These amounts exclude $15,000 and $43,000 of inventory purchases related to the PASSUR Network for the three and six months ended April 30, 2017, respectively.  For the three and six month ended April 30, 2016, the Company capitalized $163,000 and $338,000, of PASSUR Network costs, respectively. These amounts exclude $34,000 and $55,000 of inventory purchases related to the PASSUR Network for the three and six months ended April 30, 2016, respectively. Depreciation is charged to cost of revenues and is recorded using the straight-line method over the estimated useful life of the asset, which is estimated at five years for SMLAT Systems and seven years for PASSUR Systems. The Company depreciated $202,000 and $418,000, of PASSUR Network costs, for the three and six months ended April 30, 2017. For the three and six months ended April 30, 2016, the Company depreciated $236,000 and $452,000 of PASSUR Network costs, respectively. PASSUR and SMLAT Systems which are not installed, raw materials, work-in-process, and finished goods components are carried at cost and no depreciation is recorded. 

 

The net carrying balance of the PASSUR Network as of April 30, 2017, and October 31, 2016, was 5918106$5,918,000 and 5739753$5,740,000, respectively. Included in the net carrying balance as of April 30, 2017, were parts and finished goods for PASSUR and SMLAT Systems totaling $931,000 and $1,697,000, respectively, which have not yet been installed. As of October 31, 2016, $1,000,000 and $1,767,000 of parts and finished goods for PASSUR and SMLAT systems, respectively, were included in the net carrying balance of the PASSUR Network. PASSUR and SMLAT Systems which are not installed are carried at cost and not depreciated until installed.