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v3.22.2.2

Change in accounting principle | 6 Months Ended
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Jun. 30, 2022
Change in accounting principle [Abstract] |
Change in accounting principle | 9. Change in accounting principle Effective April 1, 2022, TransAct changed its method of inventory valuation from standard costing which approximates FIFO to the average costing methodology. We believe this methodology is preferable because it reflects a better measurement estimate of inventory cost as we do not typically perform intensive manufacturing of our finished products which are therefore better measured under average cost. In addition, our business is projected to include an increasing sales volume of software going forward, which better aligns with average costing. Comparative financial statements of prior periods have been adjusted to apply the new method retrospectively. Tax effects are calculated at the Company’s marginal tax rate, or the tax impact of incremental income changes rather than the average tax rate applied to our total net loss before income taxes. The following financial statement line items for the periods presented were impacted by the change in accounting principle. The effect of the changes made to the Company’s Condensed Consolidated Balance Sheets follows:
|  | December 31, 2021 |
|  | Under FIFO Cost |  |  | Under Average Cost |  |  | Effect of Change |
Inventories |  | $ | 7,720 |  |  | $ | 7,711 |  |  | $ | (9 | )
Deferred tax assets |  |  | 5,141 |  |  |  | 5,143 |  |  |  | 2 |
Retained earnings |  |  | 15,573 |  |  |  | 15,566 |  |  |  | (7 | )
The ending balance in retained earnings as of December 31, 2020 was adjusted from $19,718 to $19,607. The effect of the changes made to the Company’s Condensed Consolidated Statements of Operations follows:
|  | Three months ended March 31, 2022 |  |  | Three months ended June 30, 2021 |
|  | Under FIFO Cost |  |  | Under Average Cost |  |  | Effect of Change |  |  | Under FIFO Cost |  |  | Under Average Cost |  |  | Effect of Change |
Cost of sales |  | $ | 6,708 |  |  | $ | 7,136 |  |  | $ | 428 |  |  | $ | 6,000 |  |  | $ | 5,893 |  |  | $ | (107 | )
Gross profit |  |  | 2,994 |  |  |  | 2,566 |  |  |  | (428 | ) |  |  | 3,325 |  |  |  | 3,432 |  |  |  | 107 |
Operating loss |  |  | (5,176 | ) |  |  | (5,604 | ) |  |  | (428 | ) |  |  | (2,755 | ) |  |  | (2,648 | ) |  |  | 107 |
Loss before income taxes |  |  | (5,275 | ) |  |  | (5,703 | ) |  |  | (428 | ) |  |  | (2,801 | ) |  |  | (2,694 | ) |  |  | 107 |
Income tax benefit |  |  | 1,262 |  |  |  | 1,355 |  |  |  | 93 |  |  |  | 687 |  |  |  | 664 |  |  |  | (23 | )
Net loss |  |  | (4,013 | ) |  |  | (4,348 | ) |  |  | (335 | ) |  |  | (2,114 | ) |  |  | (2,030 | ) |  |  | 84 |
Net loss per common share: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | (0.41 | ) |  | $ | (0.44 | ) |  | $ | (0.03 | ) |  | $ | (0.24 | ) |  | $ | (0.23 | ) |  | $ | 0.01 |
Diluted |  | $ | (0.41 | ) |  | $ | (0.44 | ) |  | $ | (0.03 | ) |  | $ | (0.24 | ) |  | $ | (0.23 | ) |  | $ | 0.01 |
Shares used in per-share calculation: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  |  | 9,886 |  |  |  | 9,886 |  |  |  |  |  |  |  | 8,976 |  |  |  | 8,976 |  |  |  |  |
Diluted |  |  | 9,886 |  |  |  | 9,886 |  |  |  |  |  |  |  | 8,976 |  |  |  | 8,976 |  |  |  |  |
|  | Six months ended June 30, 2021 |
|  | Under FIFO Cost |  |  | Under Average Cost |  |  | Effect of Change |
Cost of sales |  | $ | 11,112 |  |  | $ | 10,855 |  |  | $ | (257 | )
Gross profit |  |  | 6,514 |  |  |  | 6,771 |  |  |  | 257 |
Operating loss |  |  | (5,421 | ) |  |  | (5,164 | ) |  |  | 257 |
Loss before income taxes |  |  | (5,563 | ) |  |  | (5,306 | ) |  |  | 257 |
Income tax benefit |  |  | 1,243 |  |  |  | 1,187 |  |  |  | (56 | )
Net loss |  |  | (4,320 | ) |  |  | (4,119 | ) |  |  | 201 |
Net loss per common share: |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | (0.48 | ) |  | $ | (0.46 | ) |  | $ | 0.02 |
Diluted |  | $ | (0.48 | ) |  | $ | (0.46 | ) |  | $ | 0.02 |
Shares used in per-share calculation: |  |  |  |  |  |  |  |  |  |  |  |
Basic |  |  | 8,962 |  |  |  | 8,962 |  |  |  |  |
Diluted |  |  | 8,962 |  |  |  | 8,962 |  |  |  |  |
The effect of the changes made to the Company’s Condensed Consolidated Statements of Comprehensive Loss follows:
|  | Three months ended March 31, 2022 |  |  | Three months ended June 30, 2021 |
|  | Under FIFO Cost |  |  | Under Average Cost |  |  | Effect of Change |  |  | Under FIFO Cost |  |  | Under Average Cost |  |  | Effect of Change |
Net loss |  | $ | (4,013 | ) |  | $ | (4,348 | ) |  | $ | (335 | ) |  | $ | (2,114 | ) |  | $ | (2,030 | ) |  | $ | 84 |
Comprehensive loss |  |  | (4,055 | ) |  |  | (4,390 | ) |  |  | (335 | ) |  |  | (2,082 | ) |  |  | (1,998 | ) |  |  | 84 |
|  | Six months ended June 30, 2021 |
|  | Under FIFO Cost |  |  | Under Average Cost |  |  | Effect of Change |
Net loss |  | $ | (4,320 | ) |  | $ | (4,119 | ) |  | $ | 201 |
Comprehensive loss |  |  | (4,235 | ) |  |  | (4,034 | ) |  |  | 201 |
The effect of the changes made to the Company’s Condensed Consolidated Statements of Cash Flows follows:
|  | Three months ended March 31, 2022 |  |  | Six months ended June 30, 2021 |
|  | Under FIFO Cost |  |  | Under Average Cost |  |  | Effect of Change |  |  | Under FIFO Cost |  |  | Under Average Cost |  |  | Effect of Change |
Net loss |  | $ | (4,013 | ) |  | $ | (4,348 | ) |  | $ | (335 | ) |  | $ | (4,320 | ) |  | $ | (4,119 | ) |  | $ | 201 |
Deferred income taxes |  |  | (1,262 | ) |  |  | (1,355 | ) |  |  | (93 | ) |  |  | (1,209 | ) |  |  | (1,153 | ) |  |  | 56 |
Inventories |  |  | (1,344 | ) |  |  | (916 | ) |  |  | 428 |  |  |  | 2,591 |  |  |  | 2,334 |  |  |  | (257 | )
The effect of the changes made to the Company’s Condensed Consolidated Statements of Changes in Shareholders’ Equity follows:
|  | Three months ended March 31, 2022 |  |  | Three months ended June 30, 2021 |
|  | Under FIFO Cost |  |  | Under Average Cost |  |  | Effect of Change |  |  | Under FIFO Cost |  |  | Under Average Cost |  |  | Effect of Change |
Equity beginning balance |  | $ | 38,991 |  |  | $ | 38,984 |  |  | $ | (7 | ) |  | $ | 28,363 |  |  | $ | 28,369 |  |  | $ | 6 |
Retained earnings -- beginning of period |  |  | 15,573 |  |  |  | 15,566 |  |  |  | (7 | ) |  |  | 17,512 |  |  |  | 17,518 |  |  |  | 6 |
Net loss |  |  | (4,013 | ) |  |  | (4,348 | ) |  |  | (335 | ) |  |  | (2,114 | ) |  |  | (2,030 | ) |  |  | 84 |
Retained earnings -- end of period |  |  | 11,560 |  |  |  | 11,218 |  |  |  | (342 | ) |  |  | 15,398 |  |  |  | 15,488 |  |  |  | 90 |
Equity ending balance |  |  | 35,113 |  |  |  | 34,771 |  |  |  | (342 | ) |  |  | 26,873 |  |  |  | 26,963 |  |  |  | 90 |
|  | Six months ended June 30, 2021 |
|  | Under FIFO Cost |  |  | Under Average Cost |  |  | Effect of Change |
Equity beginning balance |  | $ | 30,236 |  |  | $ | 30,125 |  |  | $ | (111 | )
Retained earnings -- beginning of period |  |  | 19,718 |  |  |  | 19,607 |  |  |  | (111 | )
Net loss |  |  | (4,320 | ) |  |  | (4,119 | ) |  |  | 201 |
Retained earnings -- end of period |  |  | 15,398 |  |  |  | 15,488 |  |  |  | 90 |
Equity ending balance |  |  | 26,873 |  |  |  | 26,963 |  |  |  | 90 |

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- Definition The entire disclosure for change in accounting principle. 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