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Note 7 - Related Party Transactions | 3 Months Ended
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Jul. 31, 2019
Notes to Financial Statements |
Related Party Transactions Disclosure [Text Block] |
Note 7 - Related Party Transactions:
Investment Management (overview):
The Company has substantial non-voting revenues and non-voting profits interests in EAM, the asset manager to the Value Line Mutual Funds. Accordingly, the Company no longer reports this operation as a separate business segment, although it still maintains a significant interest in the cash flows generated by this business and will receive non-voting revenues and non-voting profits interests, as discussed below.
Total assets in the Value Line Funds managed and/or distributed by EAM at July 31, 2019, were $3.42 billion, 28.6% above total assets of $2.66 billion in the Value Line Funds managed and/or distributed by EAM at July 31, 2018.
The Company’s non-voting revenues and non-voting profits interests in EAM entitle it to receive quarterly distributions in a range of 41% to 55% of EAM’s revenues (excluding distribution revenues) from EAM’s mutual fund and separate account business and 50% of the residual profits of EAM (subject to temporary increase in certain limited circumstances). The Voting Profits Interest Holders will receive the other 50% of residual profits of EAM. Distribution is not less than 90% of EAM’s profits payable each fiscal quarter under the provisions of the EAM Trust Agreement. Value Line’s percent share of EAM’s revenues is calculated each fiscal quarter. The applicable recent non-voting revenues interest percentage for the first quarter of fiscal 2020 was 50.71%.
EAM Trust - VLI's non-voting revenues and non-voting profits interests:
The Company holds non-voting revenues and non-voting profits interests in EAM which entitle the Company to receive from EAM an amount ranging from 41% to 55% of EAM's investment management fee revenues from its mutual fund and separate accounts business. EAM currently has no separately managed account fees. The Company recorded income from its non-voting revenues interest and its non-voting profits interests in EAM as follows:
|  | Three Months Ended July 31, |
($ in thousands) |  | 2019 |  |  | 2018 |
Non-voting revenues interest in EAM |  | $ | 2,588 |  |  | $ | 1,968 |
Non-voting profits interest in EAM |  |  | 283 |  |  |  | 303 |
|  | $ | 2,871 |  |  | $ | 2,271 |
At July 31, 2019, the Company's investment in EAM includes a receivable of $2,843,000 representing the quarterly distribution of the non-voting revenues share and non-voting profits share. That sum was subsequently paid.
Transactions with Parent:
During the three months ended July 31, 2019 and July 31, 2018, the Company was reimbursed $75,000 and $73,000, respectively, for payments it made on behalf of and for services the Company provided to the Parent Company, Arnold Bernhard and Co., Inc. ("Parent"). There were no receivables from the Parent on the Consolidated Condensed Balance Sheets at July 31, 2019 and April 30, 2019.
The Company is a party to a tax-sharing arrangement with the Parent which allocates the tax liabilities of the two Companies between them. The Company didn't make any federal tax payments to the Parent during the three months ended July 31, 2019 or July 31, 2018.
As of July 31, 2019, the Parent owned 89.38% of the outstanding shares of common stock of the Company.

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- Definition The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -URI http://asc.fasb.org/topic&trid=2122745 + Details
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