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Note 2 - Accounting Pronouncements | 12 Months Ended
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Aug. 31, 2019
Notes to Financial Statements |
Description of New Accounting Pronouncements Not yet Adopted [Text Block] | 2. ACCOUNTING PRONOUNCEMENTS New Accounting Pronouncements Adopted In May 2014, the Financial Accounting Standards Board (FASB) issued guidance creating Accounting Standards Codification (ASC) Section 606, Revenue from Contracts with Customers (ASC 606 ), which establishes a comprehensive new model for the recognition of revenue from contracts with customers. This model is based on the core principle that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. On September 1, 2018, the Company adopted ASC 606 for all customer contracts using the modified retrospective method. To determine revenue recognition for arrangements within the scope of ASC 606, the Company performs the following five steps: ( 1 ) identify the contracts with a customer; ( 2 ) identify the performance obligations in the contract; ( 3 ) determine the transaction price; ( 4 ) allocate the transaction price to the performance obligations in the contract; and ( 5 ) recognize revenue when or as the entity satisfies a performance obligation. The Company only applies the five -step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods it transfers to, or services it performs for, the customer. The adoption of ASC 606 neither impacted the previously reported financial statements in any prior period nor did it result in a cumulative effect adjustment to retained earnings. Therefore, the adoption of the standard did not impact the Company’s revenue recognition process. Generally, the Company’s performance obligations are satisfied when the customers take possession of the products, which normally occurs at the shipping point or destination depending on the terms of the contracts. The Company’s services are generally sold based upon quotes or contracts with customers that include a fixed or determinable price, and sales arrangements do not contain any significant financing component for its customers. The Company does not recognize revenue related to product warranties, nor does the Company incur significant contract costs. Customer arrangements do not generate contract assets or liabilities. The Company applies the practical expedient in paragraph 606 - 10 - 50 - 14 and does not disclose information about remaining performance obligations that have original expected durations of one year or less. There are no material obligations that extend beyond one year. Revenue is recognized when transfer of control occurs as defined by the terms in the customer agreement. The Company immediately recognizes incidental items that are immaterial in the context of the contract. The Company has applied the practical expedient in paragraph 606 - 10 - 25 - 16A and does not assess if immaterial items are promised goods or services. The Company has also applied the practical expedient in paragraph 606 - 10 - 32 - 18 regarding the adjustment of the promised amount of consideration for the effects of a significant financing component when the customer pays for that good or service within one year or less, as the Company does not have any significant financing components in its customer arrangements since payment is received at or shortly after the point of sale, generally thirty to ninety days. Recently Issued Accounting Pronouncements During February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016 - 02, Leases . ASU No. 2016 - 02 was issued to increase transparency and comparability among organizations by recognizing all lease transactions (with terms in excess of 12 months) on the balance sheet as a lease liability and a right-of-use asset (as defined). The Company will adopt this ASU for its annual and interim periods beginning September 1, 2019, and elected not to restate comparative periods in transition. The Company performed a review of the requirements of the new guidance and identified which of its leases will be within the scope of ASU 2016 - 02. The Company completed its adoption plan, which included a review of lease contracts, applying the new standard to the lease contracts and comparing the results to our current accounting. Effective for our quarter ending November 30, 2019, the Company will revise its lease accounting policy disclosures to reflect the requirements of ASU 2016 - 02. The Company estimates the impact of the adoption will be an increase in the range of $500,000 and $750,000 to both assets and liabilities on the consolidated balance sheet. The Company does not believe the adoption of this guidance will have a material impact on its consolidated results of operations or cash flows. The Company also expects additional qualitative and quantitative disclosures will be required upon adoption. In February 2018, the FASB issued ASU No. 2018 - 02, Income Statement – Reporting Comprehensive Income (Topic 220 ) Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income , which will allow a reclassification from accumulated other comprehensive income to retained earnings for the tax effects resulting from the Tax Reform Act that are stranded in accumulated other comprehensive income. This standard also requires certain disclosures about stranded tax effects. ASU No. 2018 - 02, however, does not change the underlying guidance that requires that the effect of a change in tax laws or rates be included in income from continuing operations. ASU No. 2018 - 02 will be effective for the Company’s fiscal year 2020, with the option for early adoption at any time prior to the effective date. It must be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Reform Act is recognized. The Company is currently assessing the impact this new accounting guidance will have on its consolidated financial statements. Although there are several other new accounting pronouncements issued or proposed by the FASB, which the Company has adopted or will adopt, as applicable, the Company does not believe any of these accounting pronouncements has had or will have a material impact on the Company’s consolidated financial position or operating results.

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