XML 15 R20.htm IDEA: XBRL DOCUMENT
v3.19.3.a.u2

Note 12 - Leases | 6 Months Ended
--- | ---
Oct. 31, 2019
Notes to Financial Statements |
Lessee, Operating Leases [Text Block] |
Note 12 - Leases:
In February 2016, the FASB issued ASU No. 2016 - 02, “Leases (Topic 842 )”. This ASU requires that, for leases longer than one year, a lessee recognize in the statements of financial position a right-of-use asset, representing the right to use the underlying asset for the lease term, and a lease liability, representing the liability to make lease payments. It also requires that for finance leases, a lessee recognize interest expense on the lease liability, separately from the amortization of the right-of-use asset in the statements of earnings, while for operating leases, such amounts should be recognized as a combined expense. The firm adopted this ASU in May 2019 under a modified retrospective approach.
The Company adopted ASU 2016 - 02 using a modified retrospective transition approach as of the Effective Date as permitted by the amendments in ASU 2018 - 11, which provides an alternative modified retrospective transition method. As a result, the Company was not required to adjust its comparative period financial information for effects of the standard or make the new required lease disclosures for periods before the date of adoption (i.e. May 1, 2019). The Company has elected to employ the transitionary relief offered by the FASB and, therefore, has not reassessed ( 1 ) whether existing or expired contracts contain a lease, ( 2 ) lease classification for existing or expired leases or ( 3 ) the accounting for initial direct costs that were previously capitalized.
The Company leases office space in New York, NY and a warehouse and appurtenant office space in Lyndhurst, NJ. The Company has evaluated these leases and determined that they are operating leases under the definitions of the guidance of ASU 2016 - 02.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred less any lease incentives received. For operating leases, the right-of-use asset is subsequently measured throughout the lease term at the carrying amount of the lease liability, plus initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received.
On May 1, 2019, the Company recorded a right-of-use asset in the amount of $9,575,000, which represents the lease liability of $10,340,000 adjusted for previously recorded unamortized lease incentives in the amount of $765,000. The right-of-use asset will be amortized over the remaining lease term in the amount equal to the difference between the calculated straight-line expense of the total lease payments less the monthly interest calculated on the remaining lease liability. As of October 31, 2019, the Company had a long-term lease asset of $9,046,000 recorded in property and equipment in its consolidated condensed balance sheets.
The Company will recognize lease expense, calculated as the remaining cost of the lease allocated over the remaining lease term on a straight-line basis. Lease expense will be presented as part of continuing operations in the consolidated condensed statements of income. For the six months ended October 31, 2019, the Company recognized $750,000 in lease expense.
For the six months ended October 31, 2019, the Company paid $694,000 in rent relating to the leases. As a payment arising from an operating lease, the $694,000 will be classified within operating activities in the consolidated condensed statements of cash flows.
The Company’s leases generally do not provide an implicit interest rate, and therefore the Company estimated an incremental borrowing rate, or IBR, as of the commencement date, to determine the present value of its operating lease liabilities. The IBR is defined under ASC 842 as the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term for an amount equal to the lease payments in a similar economic environment. The following table reconciles the undiscounted future minimum lease payments to the total operating lease liabilities recognized on the condensed consolidated balance sheet as of October 31, 2019:
Fiscal years ended April 30, |  | (in thousands) |
2020 * |  | $ | 705 |
2021 |  |  | 1,432 |
2022 |  |  | 1,506 |
2023 |  |  | 1,597 |
2024 |  |  | 1,634 |
Thereafter |  |  | 5,265 |
Total undiscounted future minimum lease payments |  |  | 12,139 |
Less: difference between undiscounted lease payments & the present value of future lease payments |  |  | 2,273 |
Total operating lease liabilities |  | $ | 9,866 |
* Excludes the six months ended October 31, 2019

X
- References No definition available. + Details
Name: | us-gaap_DisclosureTextBlockAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
Name: | us-gaap_LesseeOperatingLeasesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration