Note 7 - Investment in Telkoor

6 Months Ended

Jun. 30, 2013

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

NOTE 7:- INVESTMENT IN TELKOOR

On June 16, 2011 the Company has acquired 1,136,666 shares of Telkoor, a major shareholder of the Company and an Israeli company listed in the Tel Aviv stock exchange, which represents 8.8% of the outstanding shares of Telkoor. As a result of this transaction, an existing manufacturing agreement between Digital Power and Telkoor will be updated and extended. The investment is accounted for as available-for-sale security. In September 2012, the investment has been accounted for under cost method as Telkoor shares do not have readily determinable fair value on the Tel Aviv Stock Exchange. The Company evaluated the fair value of the investment with assistance of a third party valuation. Such evaluation was based upon measurement of Telkoor’s total equity value (in accordance with ASC 820 – Fair Value Measurements) using the Income Approach based upon a discounted cash flow forecast for Telkoor in addition to the market value of Telkoor’s investment in the Company. An other than temporary impairment loss of $218 was recognized in finance expenses in the quarter ended September 30, 2012. The fair value of the investment as of December 31, 2012 was $780. The Company obtained another third party evaluation (based upon the Income Approach) of the stock during the quarter ended June 30, 2013 and the fair value of the investment was reduced to $542. As a result the Company recorded an impairment loss of $196 during the quarter and six months ended June 30, 2013. The Company has evaluated the near-term prospects of the investment in relation to the severity and duration of the impairment and based on that evaluation has the ability and intent to hold these investments until a recovery of fair value. Company has two reportable geographic segments (see Note 1 for a brief description of the Company's business).