Significant Accounting Policies (Policies)

12 Months Ended

Mar. 31, 2018

Consolidation, Policy [Policy Text Block]

Principles of Consolidation

– The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, Contrail Aviation and Delphax. All intercompany transactions and balances have been eliminated in consolidation.

Equity Method Investments [Policy Text Block]

Investments under the

quity

ethod

– The Company utilizes the equity method to account for investments when the Company possesses the ability to exercise significant influence, but

not

control, over the operating and financial policies of the investee. The ability to exercise significant influence is presumed when an investor possesses more than

20%

of the voting interests of the investee. This presumption

may

be overcome based on specific facts and circumstances that demonstrate that the ability to exercise significant influence is restricted. The Company applies the equity method to investments in common stock and to other investments when such other investments possess substantially identical subordinated interests to common stock.

In applying the equity method, the Company records the investment at cost and subsequently increases or decreases the carrying amount of the investment by our proportionate share of the net earnings or losses. The Company records dividends or other equity distributions as reductions in the carrying value of the investment. In the event that net losses of the investee reduce the carrying amount to zero, additional net losses

may

be recorded if other investments in the investee are at-risk, even if the Company has

not

committed to provide financial support to the investee. Such additional equity method losses, if any, are based upon the change in the Company’s claim on the investee’s book value.

For investments that have a different fiscal year-end, if the difference is

not

more than

three

months, the Company uses the investment’s most recent financial statements to record the change in the investment.

Use of Estimates, Policy [Policy Text Block]

Accounting Estimates

– The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported and disclosed. Actual results could differ from those estimates.

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

Concentration of Credit Risk

– The Company’s potential exposure to concentrations of credit risk consists of trade accounts and notes receivable, and bank deposits. Accounts receivable are normally due within

days and the Company performs periodic credit evaluations of its customers’ financial condition. Notes receivable payments are normally due monthly. The required allowance for doubtful accounts is determined using information such as customer credit history, industry information, credit reports, customer financial condition and the collectability of past-due outstanding accounts receivables. The estimates can be affected by changes in the financial strength of the industries in which the Company is operating, customer credit issues or general economic conditions.

At various times throughout the year, the Company had deposits with banks in excess of amounts covered by federal depository insurance and investments in corporate notes that are

not

covered by insurance.

A majority of the Company’s revenues are concentrated in the aviation industry and revenues can be materially affected by current economic conditions and the price of certain supplies such as fuel, the cost of which is passed through to the Company’s cargo customer. The Company has a customer concentration in its overnight air cargo segment which provides service to

one

major customer. The loss of a major customer would have a material impact on the Company’s results of operations. See Note

“Major Customer”.

Cash and Cash Equivalents, Unrestricted Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash Equivalents

– Cash equivalents consist of liquid investments with maturities of

three

months or less when purchased.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

Foreign

xchange

- Delphax, which is headquartered in the United States, has subsidiaries in Canada, France, and the United Kingdom. The functional currency of the Delphax’s Canadian subsidiary is the U.S. dollar, whereas the functional currency of Delphax’s subsidiaries in France and the United Kingdom is the Euro and Pound Sterling, respectively. Delphax Solutions is headquartered in Canada. The functional currency of Delphax Solutions is the Canadian dollar. The balance sheets of foreign operations with a functional currency of other than the U.S. dollar are translated to U.S. dollars using rates of exchange as of the applicable balance sheet date. The statements of income (loss) items of foreign operations are translated to U.S. dollar using average rates of exchange for the applicable period. The gains and losses resulting from translation of the financial statements of Delphax’s foreign operations are recorded within the accumulated other comprehensive income (loss) and non-controlling interests categories of the Company’s consolidated equity.

Consolidation, Variable Interest Entity, Policy [Policy Text Block]

Variable Interest Entities

– In accordance with the applicable accounting guidance for the consolidation of variable interest entities, the Company analyzes its variable interests to determine if an entity in which we have a variable interest is a variable interest entity. Our analysis includes both quantitative and qualitative reviews to determine if we must consolidate a variable interest entity as its primary beneficiary.

Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block]

Goodwill

- Goodwill reflects the excess of the purchase consideration in business combinations over the estimated fair value of identifiable net assets acquired. Goodwill is

not

amortized; rather, it is subject to a periodic assessment for impairment.

Business Combinations Policy [Policy Text Block]

Business Combinations

– The Company accounts for business combinations in accordance with FASB Codification Section

805

(“ASC

805”

) Business Combinations. Consistent with ASC

805,

the Company accounts for each business combination by applying the acquisition method. Under the acquisition method, the Company records the identifiable assets acquired and liabilities assumed at their respective fair values on the acquisition date. Goodwill is recognized for the excess of the purchase consideration over the fair value of identifiable net assets acquired. Included in purchase consideration is the estimated acquisition date fair value of any earn-out obligation incurred. For business combinations where non-controlling interests remain after the acquisition, assets (including goodwill) and liabilities of the acquired business are recorded at the full fair value and the portion of the acquisition date fair value attributable to non-controlling interests is recorded as a separate line item within the equity section or, as applicable to redeemable non-controlling interests, between the liabilities and equity sections of the Company’s consolidated balance sheet

The acquisition method permits the Company a period of time after the acquisition date during which the Company

may

adjust the provisional amounts recognized in a business combination. This period of time is referred to as the “measurement period”. The measurement period provides an acquirer with a reasonable time to obtain the information necessary to identify and measure the assets acquired and liabilities assumed. If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Company reports in its consolidated financial statements provisional amounts for the items for which the accounting is incomplete. Accordingly, the Company is required to recognize adjustments to the provisional amounts, with a corresponding adjustment to goodwill, in the reporting period in which the adjustments to the provisional amounts are determined. Thus, the Company would adjust its consolidated financial statements as needed, including recognizing in its current-period earnings the full effect of changes in depreciation, amortization, or other income effects, by line item, if any, as a result of the change to the provisional amounts calculated as if the accounting had been completed at the acquisition date.

Income statement activity of an acquired business is reflected within the Company’s consolidated statements of income (loss) commencing with the date of acquisition. Amounts for pre-acquisition periods are excluded.

Acquisition-related costs are costs the Company incurs to effect a business combination. Those costs

may

include such items as finder’s fees, advisory, legal, accounting, valuation, and other professional or consulting fees, and general administrative costs. The Company accounts for such acquisition-related costs as expenses in the period in which the costs are incurred and the services are received.

Changes in estimate of the fair value of earn-out obligations subsequent to the acquisition date are

not

accounted for as part of the acquisition rather they are recognized directly in earnings.

The Company tests goodwill for impairment at least once annually. An impairment test will also be carried out anytime events or changes in circumstances indicate that goodwill might be impaired. Goodwill is tested for impairment at a level of reporting referred to as a reporting unit.

The Company is permitted to

first

assess qualitative factors to determine whether it is more likely than

not

(this is, a likelihood of more than

percent) that the fair value of a reporting unit is less than its carrying value, including goodwill. In qualitatively evaluating whether it is more likely than

not

that the fair value of a reporting unit is less than its carrying amount, the Company assesses relevant events and circumstances such as macroeconomic conditions, industry and market developments, cost factors, and the overall financial performance of the reporting unit. If, after assessing these events and circumstances, it is determined that it is

not

more likely than

not

that the fair value of a reporting unit is less than its carrying amount, then the

first

and

second

steps of the quantitative goodwill impairment test are unnecessary. In the

first

step of the quantitative method, recoverability of goodwill is evaluated by estimating the fair value of the reporting unit’s goodwill using multiple techniques, including a discounted cash flow model income approach and a market approach. The estimated fair value is then compared to the carrying value of the reporting unit. If the fair value of a reporting unit is less than its carrying value, a

second

step is performed to determine the amount of impairment loss, if any. The

second

step requires allocation of the reporting unit’s fair value to all of its assets and liabilities using the acquisition method prescribed under authoritative guidance for business combinations. Any residual fair value is allocated to goodwill. Impairment losses, limited to the carrying value of goodwill, represent the excess of the carrying amount of goodwill over its implied fair value.

Intangible Assets, Finite-Lived, Policy [Policy Text Block]

Intangible Assets

– Amortizable intangible assets consist of acquired patents, tradenames, customer relationships, and other finite-lived identifiable intangibles. Such intangibles are initially recorded at fair value and subsequently subject to amortization. Amortization is recorded using the straight-line method over the estimated useful lives of the assets. In accordance with the applicable accounting guidance, the Company evaluates the recoverability of amortizable intangible assets whenever events occur that indicate potential impairment. In doing so, the Company assesses whether the carrying amount of the asset is unrecoverable by estimating the sum of the future cash flows expected to result from the asset, undiscounted and without interest charges. If the carrying amount is more than the recoverable amount, an impairment charge must be recognized based on the estimated fair value of the asset.

The estimated amortizable lives of the intangible assets are as follows:

	Years
Software		3
Tradenames		5
Certification		5
Non-compete		5
License		5
Patents		9
Customer relationships		10

Consolidation, Subsidiaries or Other Investments, Consolidated Entities, Policy [Policy Text Block]

Attribution of

ncome or

oss of

artially-

wned

onsolidated

ntities

– In the case of Delphax, we determined that the attribution of net income or loss should be based on consideration of all of Air T’s investments in Delphax and it subsidiary, Delphax Canada Technologies Limited (“Delphax Canada”). Our investment in the Warrant provides that in the event that dividends are paid on the common stock of Delphax, the holder of the Warrant is entitled to participate in such dividends on a ratable basis as if the Warrant had been fully exercised and the shares of Series B Preferred Stock acquired upon such exercise had been converted into shares of Delphax common stock. This provision would have entitled Air T, Inc. to approximately

67%

of any Delphax dividends paid, with the remaining

33%

paid to the non-controlling interests. We concluded that this was a substantive distribution right which should be considered in the attribution of Delphax net income or loss to non-controlling interests. We furthermore concluded that our investment in the debt of Delphax should be considered in attribution. Specifically, Delphax’s net losses are attributed

first

to our Series B Preferred Stock and Warrant investments and to the non-controlling interest (

67%/33%

) until such amounts are reduced to zero. Additional losses are then fully attributed to our debt investments until they too are reduced to zero. This sequencing reflects the relative priority of debt to equity. Any further losses are then attributed to Air T and the non-controlling interests based on the initial

67%/33%

share. Delphax net income is attributed using a backwards-tracing approach with respect to previous losses. See Note

“Acquisitions—Acquisitions of Interests in Delphax,” for a description of our investments in Delphax and Delphax Canada and for the definitions of the capitalized terms used in this paragraph. The effect of interest expense arising under the Senior Subordinated Note and, since

January 6, 2017,

under the Delphax Senior Credit Agreement, and other intercompany transactions, are reflected in the attribution of Delphax net income or losses attributed to non-controlling interests because Delphax is a variable interest entity.

The above-described attribution methodology applies only to our investments in Delphax. We establish the appropriate attribution methodology on an entity-specific basis. In the case of Contrail Aviation, we concluded that an attribution methodology based solely on equity ownership percentages was appropriate.

Marketable Securities, Policy [Policy Text Block]

Marketable Securities

– In accordance with Accounting Standards Codification (“ASC”)

320,

Investments –

Debt and Equity Securities

, and based on our intentions regarding these instruments, we classify all of our marketable equity securities as available-for-sale. Marketable equity securities are reported at fair value, with all unrealized gains (losses) reflected net of tax in stockholders’ equity on our consolidated balance sheets, and as a line item in our consolidated statements of comprehensive income (loss). If we determine that an investment has other than a temporary decline in fair value, we recognize the investment loss in non-operating income, net in the accompanying consolidated statements of income (loss). We regularly evaluate our investments for impairment using both quantitative and qualitative criteria. For equity securities, we consider the length of time and magnitude of the amount of each security that is in an unrealized loss position. As of

March 31, 2018,

other than our investment in Oxbridge Re Holdings Limited, all of our marketable securities investments are classified as current based on the nature of the investments and their availability for use in current operations.

Inventory, Policy [Policy Text Block]

Inventories

– Inventories related to the Company’s manufacturing and service operations are carried at the lower of cost (determined by use of the

first

in,

first

out method) or net realizable value. When finished goods units are leased to customers under operating leases, the units are transferred to Property and Equipment. Consistent with aviation industry practice, the Company includes expendable aircraft parts and supplies in current assets, although a certain portion of these inventories

may

not

be used or sold within

one

year.

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

Property and Equipment

– Property and equipment is stated initially at cost, or fair value if purchased as part of a business combination or, in the case of equipment under capital leases, the present value of future lease payments. Depreciation and amortization are provided on a straight-line basis over the asset’s useful life. Equipment leased to customers is depreciated using an accelerated method. Useful lives range from

three

years for computer equipment,

seven

years for flight equipment,

ten

years for deicers and other equipment leased to customers and

years for buildings.

Engine assets on lease or held for lease are stated at cost, less accumulated depreciation. Certain costs incurred in connection with the acquisition of engine assets are capitalized as part of the cost of such assets. Major overhauls which improve functionality or extend original useful life are capitalized and depreciated over the estimated remaining useful life of the equipment. The Company depreciates the engines on a straight-line basis over the assets useful life from the acquisition date to a residual value. The Company believes this methodology accurately reflects the typical holding period for the assets and, that the residual value assumption reasonably approximates the selling price of the assets.

The Company assesses long-lived assets for impairment when events and circumstances indicate the assets

may

be impaired and the undiscounted cash flows estimated to be generated by those assets are less than their carrying amount. In the event it is determined that the carrying values of long-lived assets are in excess of the estimated undiscounted cash flows from those assets, the Company then will write-down the value of the assets by the excess of carrying value over fair value.

Asset Retirement Obligation [Policy Text Block]

Asset Retirement Obligation

– Under the terms of a lease for a manufacturing facility in Canada, Delphax is responsible for restoring the leased property to its original condition, normal wear and tear excepted. The Company’s accounting for the acquisition of Delphax reflects an estimated asset retirement obligation (“ARO”) liability for this matter of approximately

$560,000.

The ARO liability was determined using the present value of the estimated facility restoration costs. Determination of this estimated liability involves significant judgment. The liability is reflected on the accompanying

March 31, 2017

consolidated balance sheet within current liabilities. The liability was effectively extinguished during the quarter ended

September 30, 2017

which resulted in a gain of approximately

$563,000

being recorded on the consolidated statement of income.

Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block]

Restricted Cash

— Restricted cash consists of cash held by SAIC as statutory capital reserves and cash collateral securing SAIC’s participation in certain reinsurance pools.

Revenue Recognition, Policy [Policy Text Block]

Revenue Recognition

– The Company recognizes revenue when it is earned. This occurs when services have been rendered or products are shipped to the customer in accordance with the terms of an agreement of sale, there is a fixed or determinable selling price, title and risk of loss have been transferred, and collectability is reasonably assured. Revenues from our Overnight Air Cargo segment are generally recognized as flight operation and maintenance services are provided or, in the case of certain pass-through costs for maintenance parts and fuel, as the Company incurs the related expenditure. Within the Company’s Ground Equipment Sales segment, revenue is generally recognized at the time the related equipment has been shipped to the customer and risk of loss has been transferred. In the case of certain contracts with the U.S. Government or related prime contractors, the Company applies contract accounting and uses either the percentage-of-completion or completed contract method, as appropriate. Revenues of our Ground Support Services segment are generally recognized as the contracted services are completed. Substantially all Printing Equipment and Maintenance segment revenues are recognized upon product shipment, which is generally when transfer to the customer of loss occurs. Service revenue is recognized upon completion of services. Similarly, Commercial Jet Engines and Parts segment revenues are recognized upon shipment of parts and transfer of loss or, as applicable, upon completion of services. Leasing revenues are recognized consistent with contract terms and are generally recognized on a straight-line basis due to the operating lease classification of the underlying leases. Management fee revenues are recognized when earned based on the services provided as outlined in the Investment Management Agreements between BCCM Advisors, Inc. and the investment funds that it manages.

Although infrequent, the Company does occasionally enter into customer arrangements that involve the delivery of multiple elements. For any such arrangements, the Company applies the applicable accounting guidance in order to identify the individual accounting elements and to determine the most appropriate revenue recognition model for such elements.

We evaluate gross versus net presentation on revenues from products or services purchased and resold in accordance with the revenue recognition criteria outlined in Codification section

605

45,

Principal Agent Considerations.

Revenue Recognition, Cargo and Freight, Policy [Policy Text Block]

Operating Expenses Reimbursed by Customer

– The Company, under the terms of its overnight air cargo dry-lease service contracts, passes through to its air cargo customer certain cost components of its operations without markup. The cost of fuel, landing fees, outside maintenance, parts and certain other direct operating costs are included in operating expenses and billed to the customer, at cost, and included in overnight air cargo revenue on the accompanying statements of income (loss). These pass-through costs totaled

$23,380,000

and

$23,379,000

for the years ended

March 31, 2018

and

2017,

respectively.

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

Stock Based Compensation

– The Company has maintained a stock option plan for the benefit of certain eligible employees and directors of the Company, though

further awards

may

be made under this plan. The Company recognizes compensation expense on stock options based on their fair values over the requisite service period. The compensation cost we record for these awards is based on their fair value on the date of grant. The Company uses the Black Scholes option-pricing model as its method for valuing stock options. The key assumptions for this valuation method include the expected term of the option, stock price volatility, risk-free interest rate and dividend yield. Many of these assumptions are judgmental and highly sensitive in the determination of compensation expense.

Standard Product Warranty, Policy [Policy Text Block]

Warranty Reserves

– The Company warranties its ground equipment products for up to a

three

-year period from date of sale. The Company’s printing equipment and maintenance segment provides a limited short-term (typically

days) warranty on equipment and spare parts. Product warranty reserves are recorded at time of sale based on the historical average warranty cost and are adjusted as actual warranty cost becomes known.

Income Tax, Policy [Policy Text Block]

Income Taxes

– Income taxes have been provided using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax laws and rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

A valuation allowance against net deferred tax assets is recorded when it is more likely than

not

that such assets will

not

be fully realized. Tax credits are accounted for as a reduction of income taxes in the year in which the credit originates. All deferred income taxes are classified as noncurrent in the consolidated balance sheets. The Company recognizes the benefit of a tax position taken on a tax return, if that position is more likely than

not

of being sustained on audit, based on the technical merits of the position. An uncertain income tax position is

not

recognized if it has a less than a

50%

likelihood of being sustained.

The Tax Cuts and Jobs Act (TCJA) was signed into law by the President on Friday

December 22, 2017.

The TCJA includes the reduction in the corporate tax rate from a top rate of

35%

to a flat rate of

21%,

changes in business deductions, and many international provisions. The drop in the corporate rate is effective for tax years beginning after

December 31, 2017.

IRC Section

indicates that “if any rate of tax imposed…changes, and if the taxable year includes the effective date of the change…, then tentative taxes shall be computed by applying the rate for the period before the effective date of the change, and the rate for the period on and after such date, to the taxable income for the entire taxable year, and the tax for such taxable year shall be the sum of that proportion of each tentative tax which the number of days in each period bears to the number of days in the entire taxable year.” (

§15

(a)). As the Company is a fiscal year taxpayer, it will receive a partial benefit for the drop in the federal corporate tax rate for their fiscal year ended

March 31, 2018.

The weighted average federal tax rate computed in accordance with IRC Section

30.79%

for the current fiscal year.

The Company remeasured deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally the

21%

federal corporate tax rate. The net impact from this revaluing resulted in a tax expense recognized in the current fiscal year of

$158,000.

Additionally, the reduced corporate rate led to a reduction of Delphax’ gross deferred tax asset by

$2,139,000.

This reduction was fully offset by the change in valuation allowance, so the net tax expense was

related to Delphax.

The TCJA also repealed the corporate alternative minimum tax and made any minimum tax credit carryforwards to the extent

not

utilized refundable for tax years beginning after

December 31, 2017.

As a result, Delphax will be able to receive a refund of its minimum tax credit carryforward of

$311,000

beginning in their fiscal year ended

September 30, 2019.

Previously, a valuation allowance was established against the minimum tax credit carryforward. As a result of the TCJA relating to the refundability of the minimum tax credit carryforward, an income tax benefit was recognized by the Company during the current fiscal year and a long-term income tax receivable was established.

Income taxes have been provided using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax laws and rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

Research and Development Expense, Policy [Policy Text Block]

Research and Development Costs

– All research and development costs are expensed as incurred. The research and development costs for the fiscal year

2018

amounted approximately

$196,000

compared to

$1,042,000

for fiscal year

2017.

All research and development expenses are incurred by our printing equipment and maintenance segment.

Redeemable Noncontrolling Interest Policy [Policy Text Block]

Accounting for

edeemable

on-

ontrolling

nterest

– As more fully described in Note

to the consolidated financial statements, the Company is party to a put/call option agreement concerning the non-controlling ownership interest held in the Company’s consolidated subsidiary, Contrail Aviation. The put/call option permits Contrail Aviation, at any time after the

fifth

anniversary of the Company’s acquisition of Contrail Aviation, to purchase the non-controlling interest from the holder of such interest. The agreement also permits the holder of the non-controlling interest to sell such interest to Contrail Aviation. Per the agreement, the price is to be agreed upon by the parties or, failing such agreement, to be determined pursuant to

third

-party appraisals in a process specified in the agreement. Applicable accounting guidance requires an equity instrument that is redeemable for cash or other assets to be classified outside of permanent equity if it is redeemable (a) at a fixed or determinable price on a fixed or determinable date, (b) at the option of the holder, or (c) upon the occurrence of an event that is

not

solely within the control of the issuer. Based on this guidance, the Company has classified the Contrail Aviation non-controlling interest between the liabilities and equity sections of the accompanying

March 31, 2018

and

2017

consolidated balance sheets. If an equity instrument subject to the guidance is currently redeemable, the instrument is adjusted to its maximum redemption amount at the balance sheet date. If the equity instrument subject to the guidance is

not

currently redeemable but it is probable that the equity instrument will become redeemable (for example, when the redemption depends solely on the passage of time), the guidance permits either of the following measurement methods: (a) accrete changes in the redemption value over the period from the date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption date of the instrument using an appropriate methodology, or (b) recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period. The amount presented in temporary equity should be

less than the initial amount reported in temporary equity for the instrument. Because the Contrail Aviation equity instrument will become redeemable solely based on the passage of time, the Company determined that it is probable that the Contrail Aviation equity instrument will become redeemable. The Company has elected to apply the

first

of the

two

measurement options described above. An adjustment to the carrying amount of a non-controlling interest from the application of the above guidance does

not

impact net income or comprehensive income in the consolidated financial statements. Rather, such adjustments are treated as equity transactions.

Substantial Doubt about Going Concern [Policy Text Block]

Going Concern

– In connection with preparing its consolidated financial statements, Company management evaluates whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within

one

year after the date that the consolidated financial statements are available to be issued.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

May 2014,

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

2014

09,

Revenue from Contracts with Customers (Topic

606

)

to supersede existing revenue recognition guidance. During

2016,

the FASB issued additional ASU's to further amend the new revenue recognition guidance. Topic

606

is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. Topic

606

also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and about assets recognized for costs incurred to obtain or fulfill a contract.

The new revenue recognition standards are effective for annual reporting periods beginning after

December 15, 2017

with earlier adoption permitted for reporting periods beginning after

December 15, 2016.

Topic

606

may

be adopted using either a full retrospective approach, under which all years included in the financial statements will be presented under the revised guidance, or a modified retrospective approach, under which financial statements will be prepared under the revised guidance for the year of adoption, but

not

for prior years. Under the latter method, entities recognize a cumulative catch-up adjustment to the opening balance of retained earnings at the effective date for open contract performance at that time.

The Company's adoption efforts have included the identification of revenue within the scope of the standard, the evaluation of customer contracts in conjunction with new guidance and an assessment of the qualitative and quantitative impacts of the new standard on its financial statements. The evaluation included the application of each of the

five

steps identified in the Topic

606

revenue recognition model.

The new standard will be effective for the Company’s annual and interim periods beginning

April 1, 2018.

The Company will use the modified retrospective transition method. Results for reporting periods beginning after

April 1, 2018

will be presented according to ASU

2014

while prior period amounts will

not

be adjusted and will continue to be reported in accordance with the Company’s historic accounting policies. The main area impacted by ASU

2014

includes the recognition of revenue with the Company’s Ground Equipment Sales segment transitioning from percentage of completion to point in time. The Company calculated the transition adjustments and concluded that there would be an immaterial impact due to the adoption of ASC

606.

Beginning in the

first

quarter of fiscal

2019,

the Company plans to provide expanded recognition disclosures based on the new qualitative and quantitative disclosure requirements of the standard.

July 2015,

the FASB issued ASU

2015

11,

Simplifying the Measurement of Inventory (Topic

330

)

. This standard amends existing guidance to simplify the measurement of inventory by requiring certain inventory to be measured at the lower of cost or net realizable value. The amendment in ASU

2015

is for fiscal years beginning after

December 15, 2016,

and interim periods within fiscal years beginning after

December 15, 2017.

The amendment should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The Company has adopted ASU

2015

and concluded that the adoption did

not

have a material impact on the Company's consolidated financial statements and related disclosures.

November 2015,

the FASB issued ASU

2015

17,

Balance Sheet Classification of Deferred Taxes (Topic

740

)

. This standard eliminates the current requirement to present deferred tax liabilities and assets as current and noncurrent in a classified balance sheet. Under this new guidance, entities will be required to classify all deferred tax assets and liabilities as noncurrent. This guidance is effective for interim and annual reporting periods beginning after

December 15, 2016

with earlier adoption permitted. We adopted this amendment with the quarter ended

June 30, 2017

on a prospective basis.

January 2016,

the FASB issued ASU

2016

01,

Recognition and Measurement of Financial Assets and Financial Liabilities

, that amends the guidance on the classification and measurement of financial instruments (Subtopic

825

). ASU

2016

becomes effective in fiscal years beginning after

December 15, 2017,

including interim periods therein. ASU

2016

removes equity securities from the scope of Accounting Standards Codification (“ASC”) Topic

320

and creates ASC Topic

321,

Investments – Equity Securities

. Under the new guidance, all equity securities with readily determinable fair values are measured at fair value on the statement of financial position, with changes in fair value recorded through earnings. The update eliminates the option to record changes in the fair value of equity securities through other comprehensive income. The Company is evaluating the impact of the adoption of the standard on its consolidated financial statements. The Company currently has investments in available for sale securities and the fair value changes of such securities are, other than in the case of possible other-than-temporary impairments, currently reflected in other comprehensive income. Provided that the Company continues to hold available for sale securities after adoption of the amended guidance, earnings are likely to become more volatile.

February 2016,

the FASB issued ASU

2016

02,

Leases (Topic

842

)

. The new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than

months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition. Similarly, lessors will be required to classify leases as either sales-type, finance or operating, with classification affecting the pattern of income recognition. Classification for both lessees and lessors will be based on an assessment of whether risks and rewards as well as substantive control have been transferred through a lease contract. The new standard is effective for fiscal years beginning after

December 15, 2018,

including interim periods within those fiscal years, with early adoption permitted. A modified retrospective transition approach is required for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the consolidated financial statements, with certain practical expedients available. The Company is evaluating the impact of the adoption of the standard on its consolidated financial statements.

March 2016,

the FASB issued ASU

2016

07,

Investments – Equity Method and Joint Ventures (Topic

323

): Simplifying the Transition to the Equity Method of Accounting

, which eliminates the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. The amendments require that the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. Therefore, upon qualifying for the equity method of accounting,

retroactive adjustment of the investment is required. ASU

2016

is effective for annual reporting periods beginning after

December 15, 2016

and earlier adoption is permitted. We adopted this amendment for the year ended

March 31, 2018

in connection with the Company’s investment in Insignia Systems, Inc. as discussed in Note

March 2016,

the FASB issued ASU

2016

09,

Compensation – Stock Compensation (Topic

718

): Improvements to Employee Share-Based Payment Accounting

, which addresses several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. ASU

2016

is effective for annual reporting periods beginning after

December 15, 2016

and earlier adoption is permitted. The new standard requires that an entity recognize all excess tax benefits and tax deficiencies as income tax expense or benefit in the income statement as discrete items in the reporting period in which they occur. Under the previous standard, excess tax benefits are recognized in additional paid-in capital and tax deficiencies are recognized either as an offset to accumulated excess tax benefits, or in the income statement. This accounting guidance became effective for the Company beginning with the

June 30, 2017

quarter but had

impact on the consolidated financial statements for the year ended

March 31, 2018.

June 2016,

the FASB issued ASU

2016

13,

Financial Instruments—Credit Losses (Topic

326

): Measurement of Credit Losses on Financial Instruments

. This standard significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are

not

measured at fair value through net income, including trade receivables. The standard requires an entity to estimate its lifetime “expected credit loss” for such assets at inception, and record an allowance that, when deducted from the amortized cost basis of the financial asset, presents the net amount expected to be collected on the financial asset. Early adoption is permitted for annual periods beginning after

December 15, 2018,

and interim periods therein. The Company is currently evaluating the impact of the adoption of the standard on its consolidated financial statements and disclosures.

August 2016,

the FASB issued ASU

2016

15,

Statement of Cash Flows (Topic

230

): Classification of Certain Cash Receipts and Cash Payments

. ASU

2016

clarifies how cash receipts and cash payments in certain transactions are presented and classified in the statement of cash flows. The effective date of this update is for fiscal years, and interim periods within those fiscal years, beginning after

December 15, 2017,

with early adoption permitted. The update requires retrospective application to all periods presented but

may

be applied prospectively if retrospective application is impracticable. The Company is currently evaluating the impact of the adoption of the standard on its consolidated financial statements and disclosures.

November 2016,

the FASB issued ASU

2016

18,

Statement of Cash Flows (Topic

230

): Restricted Cash

. ASU

2016

requires that the statement of cash flows explain the changes in the combined total of restricted and unrestricted cash balance. Amounts generally described as restricted cash or restricted cash equivalents will be combined with unrestricted cash and cash equivalents when reconciling the beginning and end of period balances on the statement of cash flows. Further, the ASU requires a reconciliation of balances from the statement of cash flows to the balance sheet in situations in which the balance sheet includes more than

one

-line item of cash, cash equivalents, and restricted cash. Companies will also be disclosing the nature of the restrictions. ASU

2016

is effective for financial statements issued for fiscal years beginning after

December 15, 2017.

The Company is currently evaluating the impact of the standard on its consolidated financial statements and disclosures.

January 2017,

the FASB issued ASU

2017

01,

Clarifying the Definition of a Business (Topic

805

)

. This ASU clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The guidance is effective for fiscal years that begin after

December 15, 2017

and is to be applied prospectively. The adoption of this standard is

not

expected to have a material impact on the Company’s consolidated financial statements.

January 2017,

the FASB issued ASU

2017

04,

Intangibles – Goodwill and Other (Topic

350

): Simplifying the Test for Goodwill Impairment

. This ASU simplifies how an entity is required to test goodwill for impairment by eliminating Step Two from the goodwill impairment test. Step Two measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. Under this standard, an entity will recognize an impairment charge for the amount by which the carrying value of a reporting unit exceeds its fair value. The standard is effective for any interim goodwill impairment tests in fiscal years beginning after

December 15, 2019

and is to be applied prospectively. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after

January 1, 2017.

The Company is currently evaluating the effects that the adoption of this ASU will have on its consolidated financial statements.

May 2017,

the FASB issued ASU

2017

09,

Compensation – Stock Compensation (Topic

718

): Scope of Modification Accounting

, which provides guidance on determining which changes to the terms and conditions of share-based payment awards require an entity to apply modification accounting. This update is effective for all entities for fiscal years beginning after

December 15, 2017,

and interim periods within those years. Early adoption is permitted. The Company is currently evaluating the effects that the adoption of this ASU will have on its consolidated financial statements. The Company has

not

yet concluded how the new standard will impact the consolidated financial statements.

August 2017,

the FASB issued ASU

2017

–

Derivatives and Hedging (Topic

815

): Targeted Improvements to Accounting for Hedging Activities

, which provides guidance on hedge accounting for both financial and commodity risks. The provisions in this standard create more transparency around how economic results are presented, both on the face of the financial statements and in the footnotes, for investors and analysts. The standard is effective for public companies for fiscal years beginning after

December 15, 2018.

Early adoption is permitted in any interim period or fiscal years before the effective date of the standard. The adoption of this standard is

not

expected to have a material impact on the Company’s consolidated financial statements.

January 2018,

the FASB released guidance relating to the reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which requires companies to reclassify the stranded effects in other comprehensive income to retained earnings as a result of the change in the tax rates under the Tax Cuts and Jobs Act. The Company has opted to early adopt this pronouncement by retrospective application to each period (or periods) in which the effect of the change in the tax rate under the Tax Cuts and Jobs Act is recognized. The impact of the reclassification from other comprehensive income to retained earnings is approximately

$42,000

and was recorded as of

December 31, 2017.

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are

not

expected to have a material impact on the Company’s financial position, results of operations or cash flows.