Note - Basis of Presentation and

Accounting Policies

 

The consolidated condensed financial statements include the accounts of ADDvantage Technologies Group, Inc. and its subsidiaries, all of which are wholly owned (collectively, the “Company” or “we”). Intercompany balances and transactions have been eliminated in consolidation. The Company’s reportable segments are Wireless Infrastructure Services (“Wireless”) and Telecommunications (“Telco”).

 

The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial statements and do include all the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements.  However, the information furnished reflects all adjustments, consisting only of normal recurring items which are, in the opinion of management, necessary in order to make the consolidated condensed financial statements misleading.  The Company’s business is subject to certain seasonal variations due to weather in the geographic areas that services are performed, and to a certain extent due to calendar events and national holidays. Therefore, the results of operations for the months ended and are necessarily indicative of the results to be expected for the full fiscal year.  It is suggested that these consolidated condensed financial statements be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form -K for the fiscal year ended

 

 

The Company changed its presentation of cost of sales and operating, selling, general and administrative expenses on the consolidated condensed statements of operations.  During fiscal year the Company reviewed its financial reporting of expenses in connection with its current operating segments in order to enhance the usefulness of the presentation of the Company’s expenses.  Based on that review, the Company reclassified certain expenses into operating expenses for presentation purposes.  Operating expenses include the indirect costs associated with operating our businesses.  Indirect costs are costs that are directly attributable to projects or products, which would include indirect personnel costs, facility costs, vehicles, insurance, communication, and business taxes, among other less significant cost categories.  These costs were previously recorded in either costs of sales or operating, selling, general and administrative expenses in prior periods.  Additionally, the Company reclassified depreciation and amortization from operating, selling, general and administrative expenses into its own financial statement line item in the consolidated statements of operations.  The prior period has been reclassified to conform with the current period’s presentation of costs of sales, operating expenses, selling, general and administrative expenses, and depreciation and amortization.  These reclassifications had effect on previously reported results of operations or retained earnings.

 

 

In the FASB issued ASU - “Financial Instruments – Credit Losses (Topic ) – Measurement of Credit Losses on Financial Instruments.” This ASU requires entities to measure all expected credit losses for most financial assets held at the reporting date based on an expected loss model which includes historical experience, current conditions, and reasonable and supportable forecasts. Entities will now use forward-looking information to better form their credit loss estimates. This ASU also requires enhanced disclosures to help financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity’s portfolio. ASU - is effective for annual periods beginning after including interim periods within those fiscal periods. Entities adopt earlier as of the fiscal year beginning after including interim periods within those fiscal years. We are currently in the process of evaluating this new standard update.