Note 1 - Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

Throughout this report, the terms “we”, “us”, “ours”, “ISC” and “company” refer to Intelligent Systems Corporation, including its wholly-owned and majority-owned subsidiaries. The unaudited Consolidated Financial Statements presented in this Form

10

-Q have been prepared in accordance with accounting principles generally accepted in the United States applicable to interim financial statements. Accordingly, they do

not

include all of the information and notes required for complete financial statements. In the opinion of ISC management, these Consolidated Financial Statements contain all adjustments (which comprise only normal and recurring accruals) necessary to present fairly the financial position and results of operations as of and for the

three

month periods ended

March 31, 2021

and

2020.

The interim results for the

three

months ended

March 31, 2021

are

not

necessarily indicative of the results to be expected for the full year. These statements should be read in conjunction with our Consolidated Financial Statements and notes thereto for the fiscal year ended

December 31, 2020,

as filed in our Annual Report on Form

10

-K.

There have been

no

material changes in the Company's significant accounting policies in the

first

quarter of

2021,

as compared to the significant accounting policies described in the Company's Annual Report on Form

10

-K for the year ended

December 31, 2020.

Recent Accounting Pronouncements

Not

Yet Adopted

In

June 2016,

the FASB issued ASU

No.

2016

-

13,

Measurement of Credit Losses on Financial Instruments, to require financial assets carried at amortized cost to be presented at the net amount expected to be collected based on historical experience, current conditions and forecasts. Subsequently, the FASB issued ASU

No.

2018

-

19,

Codification Improvements to Topic

326,

to clarify that receivables arising from operating leases are within the scope of lease accounting standards. Further, the FASB issued ASU

No.

2019

-

04,

ASU

No.

2019

-

05,

ASU

2019

-

10

and ASU

2019

-

11

to provide additional guidance on the credit losses standard. The ASUs are effective for interim and annual periods beginning after

December 15, 2022,

with early adoption permitted. Adoption of the ASUs is on a modified retrospective basis. We plan to adopt the ASUs on

January 1, 2023.

The ASUs are currently

not

expected to have a material impact on our Consolidated Financial Statements.

Recent Accounting Pronouncements Adopted

In

December 2019,

the FASB issued ASU

2019

-

12,

Income Taxes (Topic

740

): Simplifying the Accounting for Income Taxes. This standard simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in Topic

740

related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill and allocating consolidated income taxes to separate financial statements of entities

not

subject to income tax. This standard is effective for fiscal years beginning after

December 15, 2020,

with early adoption permitted. We adopted this standard in the

first

quarter of

2021

and the adoption did

not

have a material impact on the Consolidated Financial Statements.

In

January 2020,

the FASB issued ASU

2020

-

01,

Investments-Equity Securities (Topic

321

), Investments-Equity Method and Joint Ventures (Topic

323

), and Derivatives and Hedging (Topic

815

): Clarifying the Interactions between Topic

321,

Topic

323,

and Topic

815

(“ASU

2020

-

01”

), which clarifies certain interactions between the guidance to account for certain equity securities, investments under the equity method of accounting and forward contracts or purchased options to purchase securities under Topic

321,

Topic

323

and Topic

815.

For public entities, ASU

2020

-

01

is effective for fiscal years, including interim periods within those fiscal years, beginning after

December 15, 2020.

We adopted this standard in the

first

quarter of

2021

and the adoption did

not

have a material impact on the Consolidated Financial Statements.

We have considered all other recently issued accounting pronouncements and do

not

believe the adoption of such pronouncements will have a material impact on our Consolidated Financial Statements.