Customer Deposits

12 Months Ended

Apr. 30, 2012

Customer Deposits [Abstract]

Other Liabilities Disclosure [Text Block]

CUSTOMER DEPOSITS

The contract for the potted coil assembly, dated March 7, 2012, provides for milestone payments in the aggregate amount of $1,400,000 to be paid by the customer. This aggregate amount will be used to procure raw materials and to establish a 500-piece finished goods buffer. These milestone payments will be recovered by the customer ratably over the course of the contract as invoices are paid. As of April 30, 2012, we had not yet received any milestone payments associated with this new contract. In accordance with its revenue recognition policy, we will recognize revenue on this contract upon monthly shipment of the product.

Torotel received milestone payments in the aggregate amount of $1,337,000 from the previous contract for the potted coil assembly, which had its final shipments made in April 2012. Our liability for unrecovered milestone payments associated with this contract was $116,000. This net amount is reflected as a customer deposit under current liabilities in the accompanying consolidated balance sheet as of April 30, 2012.

For certain customers, we collect payment of the shipment at the time the order is placed. These deposits are classified as a liability and will be recognized as revenue at the time of shipment in accordance with our revenue recognition policy. As of April 30, 2012 we had approximately $90,000 in customer deposits related to this arrangement.