Note B - Marketable Securities

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

NOTE B - MARKETABLE SECURITIES

Marketable securities include investments in fixed income and equity mutual funds and U.S. Government securities with maturities greater than

3

months, which are reported at their fair values.

Effective

January 2018,

the Company adopted Accounting Standards Update (“ASU”)

2016

-

01,

“Recognition and Measurement of Financial Assets and Financial Liabilities”. This amendment required companies to measure equity investments at fair value with the changes in fair value recognized in net income. In accordance with the implementation of the standard, the Company recognized a cumulative-effect adjustment, related to unrealized gains on marketable equity securities, to reduce accumulated other comprehensive income and increase retained earnings on

January 1, 2018

by

$466,025.

The Company’s U.S. Treasury Bills are considered debt securities and any unrealized gains and losses are reported in other comprehensive income. The U.S. Treasury Bills are considered held to maturity securities, as they are purchased directly from the U.S. Government and are unable to be sold before the maturity date.

The disaggregated net gains and losses on the marketable securities recognized in the income statement for the years ended

December 31, 2019

and

2018

are as follows:

	Years ended December 31,
	2019			2018
Net gains (losses) recognized during the year on marketable securities	$	431,076		$	(333,138	)
Less: Net gains recognized during the year on marketable securities sold during the period		(262,399	)		(4,204	)
Unrealized gains (losses) recognized during the reporting year on marketable securities still held at the reporting date	$	168,677		$	(337,342	)

The fair values of the Company’s marketable securities are determined in accordance with  US GAAP, with fair value being defined as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the Company utilizes the

three

-tier value hierarchy, as prescribed by US GAAP, which prioritizes the inputs used in measuring fair value as follows:

•          Level

1

- inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

•          Level

2

- inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

•          Level

3

– inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The Company’s marketable equity securities, which are considered available-for-sale securities, are re-measured to fair value on a recurring basis and are valued using Level

1

inputs using quoted prices (unadjusted) for identical assets in active markets. The following tables summarize the Company’s investments:

December 31, 2019

Debt Securities	Cost		Fair Value		Unrealized Gain
U.S Treasury Bills (maturities of greater than three months up to one year)	$	3,481,625	$	3,481,625	$	-
Total debt securities		3,481,625		3,481,625		-
Equity Securities
Fixed income mutual funds		1,940,071		2,122,157		182,086
Equity and other mutual funds		1,024,580		1,263,734		239,154
Total equity securities		2,964,651		3,385,891		421,240
Total marketable securities	$	6,446,276	$	6,867,516	$	421,240

December 31, 2018

Debt Securities
U.S Treasury Bills (maturities of greater than three months up to one year)	$	3,742,681	$	3,742,681	$	-
Total debt securities		3,742,681		3,742,681		-
Equity Securities
Fixed income mutual funds		2,408,799		2,409,213		414
Equity and other mutual funds		1,218,153		1,470,302		252,149
Total equity securities		3,626,952		3,879,515		252,563
Total marketable securities	$	7,369,633	$	7,622,196	$	252,563

Investment income is recognized when earned and consists principally of interest income from fixed income mutual funds and U.S. Treasury Bills and dividend income from equity and other mutual funds. Realized gains and losses on sales of investments are determined on a specific identification basis.

Proceeds from the sale and redemption of marketable securities amounted to

$15,964,917

for the year ended

December 31, 2019,

which included realized gains of

$262,399.

Proceeds from the sale and redemption of marketable securities for the year ended

December 31, 2018

amounted to

$8,022,804,

which included realized gains of

$4,204.