Note 9 - Accounting for Financial Instruments - Credit Losses |
3 Months Ended |
|---|---|
Mar. 31, 2026 | |
| Notes to Financial Statements | |
| Credit Loss, Financial Instrument [Text Block] |
9. Accounting for Financial Instruments – Credit Losses
The Company recognizes an allowance for trade receivables to present the net amount expected to be collected as of the balance sheet date in accordance with ASU 2025-05. In July 2025, the Financial Accounting Standard Board (“FASB”) issued ASU 2025-05, which provides (1) all entities with a practical expedient and (2) entities other than public business entities with an accounting policy election when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606, Revenue from Contracts with Customers. The practical expedient allows an entity to assume that, when estimating expected credit losses, current conditions as of the balance sheet date remain unchanged for the remaining life of the asset. The Company adopted ASU 2025-05 for the year ended December 31, 2025. The adoption did not have a material impact on its financial condition, results of operations or cash flows.
The Company performs ongoing credit evaluations of its customers and adjust credit limits, as determined by a review of current credit information. In addition, the Company continuously monitors collection and payments from customers and maintains an allowance for credit losses based upon historical experience, anticipation of uncollectible accounts receivable and any specific customer collection issues that have been identified. While the Company’s credit losses have historically been low and within expectations, we may not experience the same credit loss rates that have historically been attained in the future. The receivables are highly concentrated in a relatively small number of customers. Therefore, a significant change in the liquidity, financial position, or willingness to pay timely, or at all, of any one of our significant customers would have a significant impact on our results of operations and cash flows.
The timing between recognition of revenue for product sales and the receipt of payment is not significant. The Company’s standard credit terms, which vary depending on the customer, range between 30 and 60 days. Prompt-pay discounts are offered to some customers; however, due to the uncertainty of the customers taking the discounts, the discounts are recorded when they are taken. |