Note 11 - Investment in Telkoor

12 Months Ended

Dec. 31, 2013

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

NOTE 11:-         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 represented 8.8% of the outstanding shares of Telkoor. As a result of this transaction, an existing manufacturing agreement between Digital Power and Telkoor was updated and extended.

Until September 30, 2012 the investment was accounted for as available-for-sale security. The Company evaluated the fair value of the investment with assistance of a third party valuation. The fair value of the investment as of December 31, 2012 was $780. 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.

Management has determined that the volume of Telkoor stock activity on the Israel exchange does not accurately reflect the fair value. Telkoor share trade volume permanently decreased since it was classified in the Tel Aviv Stock Exchange ("TASE") in the reserved list ("pink sheet") in July 2011. As a result, Management believes that the market is inactive and provides insufficient data of the Telkoor shares' fair value. Therefore, Management sought an independent appraisal in November 2012 and again in July, 2013 to determine the fair value of the investment. Based on the factors considered by the Company, the Company concluded that unrealized losses on its available-for-sale securities were other-than-temporary. As such, the Company recognized an impairment charge of $218 on outstanding securities during the year ended December 31, 2012 which was classified as other expenses and reversed the temporary loss recognized in 2011. In the year ended December 31, 2013, the Company recognized an impairment charge, net of a dividend received ($64) in the first quarter of 2013, of $312 based upon information available with respect to transactions between investors in Telkoor's share subsequent to the balance sheet date with share price of 1.24 NIS, The Company concluded that the price paid in these transactions was the fair value of its own Telkoor shares under ASC 325. In accordance with ASC 325, Telkoor’s equity shares held by the Company are presented at cost and will be reviewed for impairment in accordance with ASC 320. Telkoor was traded until July, 2013.