Note B - New Accounting Standards

9 Months Ended

Dec. 31, 2020

Notes to Financial Statements

Accounting Standards Update and Change in Accounting Principle [Text Block]

NOTE B — NEW ACCOUNTING STANDARDS

Recently Adopted Accounting Standards

In

February 2016,

the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update

No.

2016

-

02,

Leases (“ASU

2016

-

02”

). ASU

2016

-

02

establishes a new lease accounting standard that requires lessees to recognize a right of use asset and related lease liability for most leases having lease terms of more than

12

months. Leases with a term of

12

months or less will be accounted for similar to prior guidance for operating leases. In

July 2018,

the FASB issued Accounting Standards Update

No.

2018

-

10,

Codification Improvements to Topic

842,

Leases, to clarify how to apply certain aspects of the new standard. In

July 2018,

the FASB also issued Accounting Standards Update

No.

2018

-

11,

Leases (Topic

842

): Targeted Improvements, to give entities another option for transition and to provide practical expedients to reduce the cost and complexity of implementing the new standard. ASU

2016

-

02

and all subsequently issued amendments, collectively "ASC

842,"

is effective for fiscal years beginning after

December 15, 2018,

including interim periods within those fiscal years.

The Company adopted ASC

842

on

April 1, 2019

using the optional transition method under which the new standard is applied only to the most current period presented and the cumulative effect of applying the new standard to existing lease agreements is recognized at the date of initial application. The adoption of ASC

842

resulted in the recording of initial right-of-use lease assets and lease liabilities of approximately

$63,000

.

The Company elected the package of transition practical expedients related to lease identification, lease classification, and initial direct costs. In addition, the Company made the following accounting policy elections: (

1

) the Company will

not

separate lease and non-lease components by class of underlying asset and (

2

) the Company will apply the short-term lease exemption by class of underlying asset. The adoption of this standard did

not

have a material impact on the Company's consolidated statement of operations or cash flows and did

not

result in a cumulative adjustment to retained earnings. See Note E – Leases for additional information.

In

August 2017,

the FASB issued Accounting Standards Update

No.

2017

-

12,

Derivatives and Hedging (Topic

815

): Targeted Improvements to Accounting for Hedging Activities (“ASU

2017

-

12”

). ASU

2017

-

12

is intended to simplify and clarify the accounting and disclosure requirements for hedging activities by more closely aligning the results of cash flow and fair value hedge accounting with the underlying risk management activities. We adopted ASU

2017

-

12

on

June 18, 2020

when we entered into our

first

derivative financial instruments. See Note H – Derivative Financial Instruments for additional information.

Accounting Standards

Not

Yet Adopted 

In

June 2016,

the FASB issued Accounting Standards Update

2016

-

13,

Financial Instruments — Credit Losses (ASC

326

): Measurement of Credit Losses on Financial Instruments (“ASU

2016

-

13”

). ASU

2016

-

13

requires, among other things, the use of a new current expected credit loss ("CECL") model to determine the allowance for doubtful accounts with respect to accounts receivable. The CECL model requires estimation of lifetime expected credit loss with respect to receivables and recognition of allowances that, when deducted from the balance of the receivables, represent the net amounts expected to be collected. Subsequently, in

November 2018,

the FASB issued Accounting Standards Update

2018

-

19,

Codification Improvements to Topic

326,

Financial Instruments – Credit Losses (ASC

326

), which clarifies that impairment of receivables arising from operating leases should be accounted for in accordance with ASC

842,

Leases. ASU

2016

-

13

called for an effective date for annual periods, including interim periods within those annual periods, beginning after

December 15, 2019.

In

November 2019,

the FASB issued Accounting Standards Update

2019

-

10,

Financial Instruments ‒ Credit Losses (Topic

326

), Derivatives and Hedging (Topic

815

), and Leases (Topic

842

): Effective Dates (“ASU

2019

-

10”

). ASU

2019

-

10

defers the effective date of ASU

2016

-

13

for SEC filers that are eligible to be smaller reporting companies, private companies,

not

-for-profit organizations and employee benefit plans to annual periods beginning after

December 15, 2022,

including interim periods within those annual periods. The Company qualifies as a smaller reporting company and does

not

expect to early adopt ASU

2016

-

13.

The Company is currently evaluating the impact of the new guidance on the consolidated financial statements.

In

December 2019,

the FASB issued Accounting Standards Update

2019

-

12,

Income Taxes (Topic

740

): Simplifying the Accounting for Income Taxes (“ASU

2019

-

12”

), which simplifies accounting for income taxes by revising or clarifying existing guidance in ASC

740,

as well as removing certain exceptions within ASC

740.

ASU

2019

-

12

is effective for annual reporting periods beginning after

December 15, 2020

and interim periods within those annual periods, with early adoption permitted. The Company is currently evaluating the impact of the new guidance on the consolidated financial statements.