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Significant Accounting Policies (Policies)
6 Months Ended
Jun. 30, 2019
Accounting Policies [Abstract]  
Revenue from Contract with Customer [Policy Text Block]
Revenue Recognition
 
On
January 1, 2018,
we adopted accounting standard ASC
606,
Revenue from Contracts with Customers and all the related amendments using the modified retrospective method for all customer contracts
not
yet completed as of the adoption date. Results for reporting periods beginning
January 1, 2018
are presented under ASC
606,
while prior period amounts were
not
adjusted.
 
The adoption of ASC
606
did
not
have a significant impact on our Consolidated Financial Statements as of and for the
three
and
six
month periods ended
June 30, 2018
and, as a result, comparisons of revenues and operating profits performance between periods are
not
affected by the adoption of this ASU.
 
The Company designs, manufactures and sells custom chemical vapor deposition equipment through contractual agreements. These system sales require the Company to deliver functioning equipment that is generally completed within
three
to
eighteen
months from commencement of order acceptance. The Company recognizes revenue over time by using an input method based on costs incurred as it depicts the Company’s progress toward satisfaction of the performance obligation. Under this method, revenue arising from fixed price contracts is recognized as work is performed based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligations.
 
Incurred costs include all direct material and labor costs and those indirect costs related to contract performance, such as indirect labor, supplies, tools, repairs and depreciation costs. Contract material costs are included in incurred costs when the project materials have been purchased or moved to work in process as required by the project’s engineering design. Cost based input methods of revenue recognition require the Company to make estimates of costs to complete the projects. In making such estimates, significant judgment is required to evaluate assumptions related to the costs to complete the projects, including materials, labor and other system costs. If the estimated total costs on any contract are greater than the net contract revenues, the Company recognizes the entire estimated loss in the period the loss becomes known and can be reasonably estimated.
 
“Contract assets,” include unbilled amounts typically resulting from sales under contracts when revenue recognition is utilized and revenue recognized exceeds the amount billed to the customer. The amount
may
not
exceed their estimated net realizable value. Contract assets are classified as current based on our contract operating cycle.
 
“Contract liabilities,” include advance payments and billings in excess of revenue recognized. Contract liabilities are classified as current based on our contract operating cycle and reported on a contract-by-contract basis, net of revenue recognized, at the end of each reporting period.
 
For outright sales of products, revenue is recognized when control of the promised products or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those products or services (the transaction price). A performance obligation is a promise in a contract to transfer a distinct product or service to a customer and is the unit of account under ASC
606.
Research and Development Expense, Policy [Policy Text Block]
Research
and
Development
 
Research and development costs are expensed as incurred. Due to the highly technical nature of our projects, we use our technical staff in a dual role, and based on their contribution to the customer or research and development projects, their costs are charged accordingly to either cost of goods sold or research and development.
New Accounting Pronouncements, Policy [Policy Text Block]
Recent Accounting Pronouncements
 
 
 
In
June 2016,
the FASB issued ASU
2016
-
13,
F
inancial Instruments – Credit Losses (Topic
326
)
, which require that financial assets measured at amortized cost be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset to present the net carrying value at the amount expected to be collected. The income statement reflects the measurement of credit losses for newly recognized financial assets, as well as the increase or decreases of expected credit losses that have taken place during the period. The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The amendments in this update are effective for fiscal years beginning after
December 15, 2019
and interim periods within those annual periods. Early adoption for fiscal years beginning after
December 15, 2018
is permitted. We are currently evaluating the effect of this update on our consolidated financial statements.
 
Recently Adopted Accounting Pronouncements
 
In
February 2016
the FASB issued ASU
No.
2016
-
02,
"Leases (Topic
842
)" (ASU
2016
-
02
). The primary difference between previous GAAP and ASU
2016
-
02
is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP. The guidance requires a lessee to recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. When measuring assets and liabilities arising from a lease, a lessee (and a lessor) should include payments to be made in optional periods only if the lessee is reasonably certain to exercise an option to extend the lease or
not
to exercise an option to terminate the lease. Similarly, optional payments to purchase the underlying asset should be included in the measurement of lease assets and lease liabilities only if the lessee is reasonably certain to exercise that purchase option. For leases with a term of
12
months or less, a lessee is permitted to make an accounting policy election by class of underlying asset
not
to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. ASU
2016
-
02
is effective for fiscal years beginning after
December 15, 2018.
Lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities
may
elect to apply.
 
An entity that elects to apply the practical expedients will, in effect, continue to account for leases that commence before the effective date in accordance with previous GAAP unless the lease is modified, except that lessees are required to recognize a right-of-use asset and a lease liability for all operating leases at each reporting date based on the present value of the remaining minimum rental payments that were tracked and disclosed under previous GAAP. In addition, FASB has amended Topic
842
prior to it becoming effective. The effective date and transition requirements for these amendments to Topic
842
are the same as ASU
2016
-
02.
The Company has
one
lease at its Denmark facility which currently expires at
December 31, 2020
and has recognized a lease liability and a right-of-use asset representing its right to use the underlying asset for the lease term in the amount of
$129,000
.
 
 
We believe there is
no
additional new accounting guidance adopted, but
not
yet effective that is relevant to the readers of our financial statements. However, there are numerous new proposals under development which, if and when enacted,
may
have a significant impact on our financial reporting.