Quarterly report pursuant to Section 13 or 15(d)

Significant Accounting Policies (Policies)

v3.20.4
Significant Accounting Policies (Policies)
9 Months Ended
Dec. 26, 2020
Accounting Policies [Abstract]  
Consolidation, Policy [Policy Text Block]
Principles of Consolidation
The consolidated financial statements include the accounts of Giga-tronics and its wholly owned subsidiary, Microsource, Inc. (“Microsource”). All significant intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates, Policy [Policy Text Block]
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Lessee, Leases [Policy Text Block]
Leases
 
In
February 2016,
the Financial Accounting Standards Board (“FASB”) issued ASU
2016
-
02
-
Leases
(ASC
842
), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or
not
the lease is effectively a financed purchase by the lessee. This classification determines whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than
12
months regardless of their classification. Leases with a term of
12
months or less are accounted for similar to guidance for operating leases existing prior to ASC
842.
ASC
842
supersedes the previous leases standard, ASC
840
Leases. The Company adopted ASC
842
as of
March 31, 2019.
The new standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. In
July 2018,
the FASB issued ASU
No.
2018
-
11,
Leases (Topic
842
): Targeted Improvements, which amends ASC Topic
842
to provide another transition method, allowing a cumulative effect adjustment to the opening balance of retained earnings during the period of adoption. The Company has
two
long term office leases; however, the New Hampshire lease is deemed immaterial upon adoption of ASC
842.
The adoption of ASU
2016
-
02
on
March 31, 2019
resulted in the recognition of right-of-use assets of approximately
$1.4
million, lease liabilities for operating leases of approximately
$1.8
million and
no
material impact to the Consolidated Statements of Operations or Cash Flows. See below for further information regarding the impact of the adoption of ASU
2016
-
02
on the Company's financial statements.
New Accounting Pronouncements, Policy [Policy Text Block]
New Accounting Standards
 
In
June 2018,
the FASB issued ASU
2018
-
07,
“Improvements to Nonemployee Share-Based Payment Accounting,” to simplify the accounting for share based transactions with nonemployees in which the grantor acquires goods or services to be used or consumed. Under the new standard, most of the guidance on recording share-based compensation granted to nonemployees are aligned with the requirements for share-based compensation granted to employees. This standard was effective in the
first
quarter of fiscal
2020,
and early adoption is permitted. We do
not
expect the adoption of this standard to have a material impact on our consolidated financial statements.
 
In
February 2016,
the FASB issued authoritative guidance under ASU
2016
-
02,
Leases (Topic
842
). ASU
2016
-
02
requires lessees to recognize right-of-use assets and lease liabilities for most leases on the balance sheet and to provide expanded disclosures about leasing arrangements. The Company adopted the standard effective
March 31, 
2019
using the optional transition method and did
not
restate comparative periods. There was
no
effect on accumulated deficit at adoption.
Revenue from Contract with Customer [Policy Text Block]
Practical
E
xpedients
E
lected
 
The Company has elected the package of practical expedients to (a)
not
reassess whether expired or existing contracts are or contain leases, (b)
not
reassess the lease classification for any expired or existing leases and (c)
not
reassess the accounting for initial direct costs. As a result, leases classified as operating leases prior to adoption of the new lease standard remain as operating leases and leases classified as capital leases prior to adoption of the new lease standard are now finance leases.