Summary of Significant Accounting Policies

6 Months Ended

Jan. 31, 2012

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 4. Summary of Significant Accounting Policies

 Deferred revenue:  During the second quarter of fiscal 2011, the Company received a payment from Codman & Shurtleff, Inc. (“Codman”), a marketing partner, to establish exclusivity on certain electrosurgical generator products and accessories.  Revenue from the payment has been deferred and is being amortized over the expected term of the agreement.  The Company recognized $131,000 and $266,000 of this deferred revenue for the three and six months ended January 31, 2012, respectively.  In addition, included in deferred revenue is an amount the Company received pursuant to a Confidential Settlement and License Agreement with Alcon, Inc. (“Alcon”).  This payment is accounted for as an up-front licensing fee.  Recognition of the revenue pursuant to this agreement has been deferred and is being recognized over a period of up to fifteen years based upon estimated shipments to Alcon under a related Supply Agreement executed pursuant to the settlement.  The Company recognized $322,000 and $585,000 of this deferred revenue for the three and six months ended January 31, 2012, respectively.    

    The Company's significant accounting policies are disclosed in the Annual Report. In the first six months of fiscal 2012, no significant accounting policies were changed.