Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2017

Consolidation, Policy [Policy Text Block]

Principles of C

onsolidation

The consolidated financial statements include the accounts of Avalon, its wholly owned subsidiaries and those companies in which Avalon has managerial control.

All significant intercompany accounts and transactions have been eliminated in consolidation.

Subsequent Events, Policy [Policy Text Block]

Subsequent E

vents

Avalon evaluated subsequent events for potential recognition and disclosure through the date the financial statements were issued.

Presentation Revision [Policy Text Block]

Presentation Revision

o comply with SEC Regulation S-

Rule

03,

the Company revised its presentation of net operating revenues and associated operating costs separately for all significant revenue types, consisting of our waste management services as well as food, beverage and merchandise sales and other golf operations, each within our golf and related operations segment in our Consolidated Statements of Operations. The Company determined that this revision is

not

material to any prior period and has reflected this revision in the Consolidated Statements of Operations for the years ended

December 31, 2017

and

2016.

This presentation did

not

affect total revenue, total costs and expenses, operating loss, net loss or net loss attributable to Avalon Holdings Corporation common shareholders.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash E

quivalents

The Company considers all highly liquid investments with a maturity of

three

months or less when purchased to be cash equivalents

for purposes of the Consolidated Statements of Cash Flows and Consolidated Balance Sheets. Avalon maintains its cash balances in various financial institutions. These balances

may,

at times, exceed federal insured limits. Avalon has

not

experienced any losses in such accounts and believes it is

not

exposed to any significant credit risk relating to its cash and cash equivalents.

Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block]

Restricted C

ash

Cash and cash equivalents that are restricted as to withdrawal or use under the terms of certain contractual agreements are recorded in restricted cash on the Consolidated Balance Sheets. Restricted cash of

$2.8

million and

$2.9

million at

December 31, 2017

and

2016,

respectively, consists of loan proceeds deposited into a proj

ect fund account to fund costs associated with the renovation and expansion of The Avalon Inn in accordance with the provisions of the loan and security agreement (See Note

Inventory, Policy [Policy Text Block]

Inventories

Inventories are state

d at the lower of cost or net realizable value. Cost of inventories is determined by the average cost method. If necessary, a provision for potentially obsolete or slow-moving inventory is made based on management’s analysis of inventory levels and future sales forecasts.

Fair Value of Financial Instruments, Policy [Policy Text Block]

Financial I

nstruments

The Company follows the guidance included in

the Financial Accounting Standard Board (“FASB”) Accounting Standards Codification (“ASC”)

820,

Fair Value Measurements and Disclosures

, for its financial assets and liabilities. The fair value of financial instruments consisting of cash, cash equivalents, restricted cash, accounts receivable, and accounts payable at

December 31, 2017

and

2016

approximates carrying value due to the relative short maturity of these financial instruments.

The fair value of the Company

’s term loan approximates carrying value at

December 31, 2017,

as neither the Company’s credit rating nor market credit conditions have changed substantially since the debt was refinanced in

December 2016.

Property, Plant and Equipment, Policy [Policy Text Block]

Property and E

quipment

Property and equipment is stated at cost and depreciated using the straight-line method over the estimated useful life of the asset which varies from

years for land improvements;

years in the case of buildings and improvements; and from

years for machinery and equipment, vehicles and office furniture and equipment (See Note

Major additions and improvements are charged to the property and equipment accounts while replacements, maintenance and repairs, which do

not

improve or extend the life of the respecti

ve asset, are expensed as incurred. The cost of assets retired or otherwise disposed of and the related accumulated depreciation is eliminated from the accounts in the year of disposal. Gains or losses resulting from disposals of property and equipment are credited or charged to operations. Interest costs are capitalized on significant construction projects.

Debt, Policy [Policy Text Block]

ebt I

ssuance

osts

Debt issuance costs are capitalized and amortized over the life of the related debt. Amortization of deferred financing costs is included in interest expense in the Consolidated Statements of Operations. Debt issuance costs

incurred related to the loan and security agreement is presented in the Consolidated Balance Sheets as a direct deduction from the carrying amount of the debt. Debt issuance costs incurred related to the line of credit agreement is presented in the Consolidated Balance Sheets as “other assets, net.”

Income Tax, Policy [Policy Text Block]

Income T

axes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and to operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded against net deferred tax assets when management believes it is more likely than

not

that such deferred tax assets will

not

be realized. Avalon recognizes any interest and penalty assessed by taxing authorities as a component of interest expense and other expense, respectively.

Revenue Recognition, Policy [Policy Text Block]

Revenue R

ecognition

Avalon recognizes revenue fo

r waste disposal brokerage and management services as services are performed. In accordance with ASC

605

45,

Revenue Recognition – Principal Agent Considerations

, we report revenue on a gross basis because we are the primary obligor in our arrangements to provide these services to our customers.

Revenues for the golf

and related operations are recognized as services are provided with the exception of annual membership dues which are recognized proportionately over the membership term. The deferred revenue relating to membership dues was approximately

$2.7

million at

December 31, 2017

and

2016,

respectively.

Receivables, Policy [Policy Text Block]

Accounts R

eceivable

The majority of Avalon

’s accounts receivable is due from industrial and commercial customers. Credit is extended based on an evaluation of a customer’s financial condition and, generally, collateral is

not

required. Accounts receivable are stated at amounts due from customers, net of an allowance for doubtful accounts. Customer accounts that are outstanding longer than the contractual payment terms are considered past due. Avalon determines its allowance by considering a number of factors, including the length of time trade accounts receivable are past due, Avalon’s previous accounts receivable loss history, the customer’s current ability to pay its obligation to Avalon and the condition of the general economy and the industry as a whole. Avalon writes off accounts receivable when they become uncollectible. Payments subsequently received on such receivables are credited to the allowance for doubtful accounts, or to income, as appropriate under the circumstances.

Lessee, Leases [Policy Text Block]

Leases

Avalon applies the accounting rules for leases to categorize leases at their inception as either operating or capital leases depending on certain defined criteria. Leasehold improvements are capitalized at cost and are amortized over the lesser of their expected useful life or the life of the lease (See

Notes

and

Equity Method Investments [Policy Text Block]

Nonc

ontrolling I

nterest

Under FASB ASC

810

10,

Consolidations

–

Over

all

(“ASC

810

10”

), a company must determine whether it has a variable interest in a legal entity being evaluated for consolidation. A variable interest entity (“VIE”) is consolidated in the financial statements if the company has the power to direct activities that most significantly impact the economic performance of the VIE and has the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE.

As a result of a private placement offering, Avalon is

not

the majority owner of AWMS Holdings, LLC.

December 31, 2017

and

2016,

respectively, Avalon owns approximately

47%

of AWMS Holdings, LLC. In accordance ASC

810

due to the managerial control of AWMS Water Solutions, LLC, AWMS Holdings, LLC is a VIE, and the financial statements of AWMS Holdings, LLC and subsidiaries are included in Avalon’s consolidated financial statements. ASC

810

requires noncontrolling interests to be reported as a separate component of equity. The amount of net loss attributable to the noncontrolling interest is recorded in “net loss attributable to noncontrolling interest” in our Consolidated Statements of Operations (See Note

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

-Based C

ompensation

Avalon re

cognizes share-based compensation expense related to stock options issued to employees and directors. Avalon estimates the fair value of the stock options granted using a Monte Carlo simulation. The Monte Carlo Simulation was selected to determine the fair value because it incorporates

six

minimum considerations;

) the exercise price of the option,

) the expected term of the option, taking into account both the contractual term of the option, the effects of employees’ expected exercise and post-vesting employment termination behavior, as well as the possibility of change in control events during the contractual term of the option agreements,

) the current fair value of the underlying equity,

) the expected volatility of the value of the underlying share for the expected term of the option,

) the expected dividends on the underlying share for the expected term of the option and

) the risk-free interest rate(s) for the expected term of the option.

Avalon amortizes the

grant date fair value of the stock options over the expected term which approximates the requisite service period. If accelerated vesting occurs based on the market performance of Avalon’s common stock, the compensation costs related to the vested stock options that have

not

previously been amortized are recognized upon vesting.

Asset Retirement Obligation [Policy Text Block]

Asset Retirement O

bligation

Avalon

recorded an estimated asset retirement obligation of

$0.1

million at

December 31, 2017

and

2016,

respectively, to plug and abandon the

two

salt water injection wells based upon an estimate from an experienced and qualified

third

party.

Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block]

Asset I

mpairments

Avalon reviews the carrying value of its long-lived assets whenever events or changes in circumstances indicate that its carrying amount

may

not

be recoverable. If indicators of impairment exist, Avalon would determine whether the estimated undiscounted sum of the future cash flows of such assets and their eventual disposition is less than its carrying amount. If less, an impairment loss would be recognized if, and to the extent that the carrying amount of such assets exceeds their respective fair value. Avalon would determine the fair value by using quoted market prices, if available, for such assets; or if quoted market prices are

not

available, Avalon would discount the expected estimated future cash flows.

For the golf and related operations segment,

Avalon does

not

believe there was a triggering event in

2017

2016

as future cash flows have

not

changed significantly and asset values have remained relatively stable.

For the waste

management services segment, in accordance with FASB ASC

360

35,

Property, Plant and Equipment – Overall – Subsequent Measurement

(“ASC

360

35”

), Avalon assessed the recoverability of the carrying values of the salt water injection wells based on the Chief of the Division of Oil and Gas Resources Management’s decision to temporarily suspend operations of the wells. Avalon estimated future cash flows directly associated with and which are expected to arise as a direct result of the wells once the temporary suspension is lifted (See Note

). The assumptions used by management in developing the estimates of future cash flows were based on current market conditions and comparable prior periods while in operation. Based on the estimated undiscounted sum of the future cash flows, the net book value of the property, plant and equipment relating to the wells of approximately

$3.7

million at

December 31, 2017

was recoverable in less than the estimated remaining useful lives of those assets.

Management will continue to consider whether indicators of impairment are present and test

for recoverability, as necessary, in accordance with ASC

360

15.

If management concludes that the carrying amount of the salt water injection wells are

not

recoverable, Avalon

may

record an impairment charge up to

$3.7

million, the carrying value of the salt water injection wells.

Regulatory Environmental Costs, Policy [Policy Text Block]

Environmental L

iabilities

When Avalon concludes that it is probable that a liability has been incurred with respect to a site, a provision is made in Avalon

’s financial statements for Avalon’s best estimate of the liability based on management’s judgment and experience, information available from regulatory agencies, and the number, financial resources and relative degree of responsibility of other potentially responsible parties who are jointly and severally liable for remediation of that site, as well as, the typical allocation of costs among such parties. If a range of possible outcomes is estimated and

amount within the range appears to be a better estimate than any other, Avalon provides for the minimum amount within the range, in accordance with generally accepted accounting principles. The liability is recognized on an undiscounted basis. Avalon’s estimates are revised, as deemed necessary, as additional information becomes known. Although Avalon is

not

currently aware of any environmental liability, there can be

assurance that in the future an environmental liability will

not

occur.

Earnings Per Share, Policy [Policy Text Block]

Basic

and D

iluted

oss

per S

hare

Basic net loss per share

attributable to Avalon Holdings Corporation common shareholders for the years ended

December 31, 2017

and

2016

is computed by dividing the net loss by the weighted average number of common shares outstanding, which were

3,803,331

for each period.

Diluted

net income (loss) per share attributable to Avalon Holdings Corporation common shareholders is computed by dividing net income (loss) by the weighted average number of common shares outstanding plus any weighted common equivalent shares determined to be outstanding during the period using the treasury method. The weighted common equivalent shares included in the calculation are related to stock options granted by Avalon where the weighted average market price of Avalon’s common stock for the period presented is greater than the option exercise price of the stock option.

For the year

s ended

December 31, 2017

and

2016,

the diluted per share amounts reported are equal to the basic per share amounts because Avalon was in a net loss position and as a result, such dilution would be considered anti-dilutive. Assuming dilution, the weighted average number of common shares outstanding for the years ended

December 31, 2017

and

2016

was

3,836,661

and

3,849,882,

respectively.

The loss

per share calculations for the years ended

December 31, 2017

and

2016

are as follows (in thousands, except per share amounts):

	2017			2016
Net loss attributable to Avalon Holdings Corporation common shareholders	$	(307	)	$	(69	)

Shares used in computing basic loss per share		3,803			3,803
Potentially dilutive shares from stock options		-			-
Shares used in computing diluted loss per share		3,803			3,803

Loss per share attributable to Avalon Holdings Corporation common shareholders
Basic and diluted net loss per share	$	(0.08	)	$	(0.02	)

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting P

ronouncements

Adopted Accounting Standards

July 2015,

the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)

2015

11,

Simplifying the Measurement of Inventory

(“ASU

2015

11”

)

to simplify the measurement of inventory. ASU

2015

requires that inventory be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The Company adopted the updated standard in the

first

quarter of

2017

with

material impact to the financial statements.

November 2015,

the FASB issued ASU

2015

17,

Balance Sheet Classification of Deferred Taxes

(“ASU

2015

17”

), which simplifies the presentation of deferred income taxes by eliminating the need for entities to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified statement of financial position. This amendment is effective for annual periods beginning after

December 15, 2016.

During the

first

quarter of

2017,

the Company adopted ASU

2015

17.

The adoption of this standard did

not

have an impact on Avalon’s financial position, results of operations or financial statement disclosures.

March 2016,

the FASB issued ASU

2016

09,

Improvements to Employee Share-Based Payment Accounting

(“ASU

2016

09”

), which simplifies several aspects of the accounting for employee share-based payment transactions including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification of related amounts within the statement of cash flows. During the

first

quarter of

2017,

the Company adopted ASU

2016

09.

The adoption of this standard did

not

have a material impact on Avalon’s financial position, results of operations or financial statement disclosures.

Accounting Standards

Not

Yet Adopted

May 2014,

the FASB

issued ASU

2014

09,

Revenue from Contracts with Customers

(“ASU

2014

09”

). ASU

2014

clarifies the principles used to recognize revenue for all entities. ASU

2014

provides a unified

five

-step model to determine when and how revenue is recognized. The core principle is that a

company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. The new standard replaces most of the existing revenue recognition standards in U.S. GAAP. In addition, in

March 2016,

the FASB issued ASU

2016

08,

Revenue from Contracts with Customers (Topic

606

): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)

, which clarifies how to apply revenue recognition guidance related to whether an entity is a principal or an agent.

The Company

reviewed the terms and conditions contained its contracts with customers relating to our brokerage and management services and captive landfill management activities for our waste management services segment. The Company considered the terms and conditions of the contracts and the all-inclusive pricing for the service contained in those contracts and determined that the waste management services provided to the customer represent a single performance obligation that meets the criteria to be accounted for under the series guidance. Avalon transfers control of the service over time and, therefore, satisfies the performance obligation and will continue to recognize the revenue over time as the customer simultaneously receives and consumes the benefits provided by Avalon’s performance as we perform.

In addition, as the promise to provide services qualifies as a series accounted for as a single performance obligation, the Company

will apply the guidance in ASC

606

which provides a practical expedient that allows an entity that is recognizing revenue over time by using an output method to recognize revenue equal to the amount that the entity has the right to invoice if the invoiced amount corresponds directly to the value transferred to the customer.

The Company also assessed whether the principal versus agent consideration would change how the Company presents revenue for these contracts. Under the contracts, the Company is primarily responsible for fulfilling the service and controls the service prior to transferring it to the customer. Based on our assessment, the Company is acting as the principal and primary obligor

under the contracts, and will continue to recognize revenue in the gross amount of consideration which it expects to be entitled in exchange for the service provided.

The Company

reviewed ASU

2014

for our golf and related operations segment. For our country club memberships, Avalon providing the “stand ready obligation” for unlimited use of the country club facilities to the member over the entire term of the membership agreement represents a single performance obligation of which Avalon expects the member to receive and consume the benefits of its obligation throughout the membership term. As such, the Company will continue to recognize membership dues on a straight line basis over the term of the contract. As a practical expedient, the Company applied this guidance to the whole portfolio of annual membership contracts as all contracts have similar characteristics. The Company determined that the effect on the financial statements of applying this guidance to the portfolio of all membership contracts does

not

differ from applying this guidance to each individual contract.

or our hotel operations, Avalon’s performance obligation is to provide lodging facilities. The separate components of providing this service are

not

distinct within the context of the contract as they are all highly dependent and interrelated as part of the obligation to provide the lodging facility. Our hotel room reservation performance obligation is satisfied over time as the hotel guest simultaneously receives and consumes the benefits provided by the hotel. For performance obligations satisfied over time, our hotel operations will continue to recognize revenue over time by measuring the progress toward complete satisfaction of that performance obligation.

For food, beverage, and merchandise sales, greens fees and associated cart rental and other ancillary services, the transaction price is the set price charged by the Company for those goods or services. Upon purchase of the good or service, the Company transfers control of the good or service to the customer and the customer immediately consumes the benefits of the Compan

y’s performance and, as such, the Company will continue to recognize revenue at the point of sale.

The Company will adopt the new revenue standard in its

first

quarter of

2018

using the modified retrospective approach adoption method. Based on our analysis, the Company does

not

believe there will be a material impact to Avalon’s consolidated revenues upon adoption or on an ongoing basis. The Company is currently finalizing its financial statement disclosures in accordance with the requirements of the standard.

February 2016,

the FASB issued ASU

2016

02,

Leases

. The new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than

months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after

December 15, 2018,

including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. Avalon is currently reviewing its agreements for its golf carts, machinery and equipment for the landfill operations, furniture and fixtures for The Avalon Inn and office copiers under operating leases and evaluating the impact the adoption of this guidance will have on its financial position, results of operations, cash flows and related disclosures. Upon adoption, the Company expects that the ROU asset and the lease liability will be recognized in the balance sheets in amounts that will be material.

June 2016,

the FASB issued ASU

2016

13,

Measurement of Credit Losses on Financial Instruments

(“ASU

2016

13”

), which significantly changes the way entities recognize impairment of many financial assets by requiring immediate recognition of estimated credit losses expected to occur over their remaining life. ASU

2016

is effective

January 1, 2020,

with early adoption permitted

January 1, 2019.

The adoption of this standard is

not

expected to have a material impact on Avalon’s financial position, results of operations or financial statement disclosures.

August 2016,

the FASB issued ASU

2016

15,

Classification of Certain Cash Receipts and Cash Payments

(“ASU

2016

15”

), which is intended to reduce diversity in practice in how certain cash receipts and payments are presented and classified in the statement of cash flows. The standard provides guidance in a number of situations including, among others, settlement of

zero

-coupon bonds, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, and distributions received from equity method investees. ASU

2016

also provides guidance for classifying cash receipts and payments that have aspects of more than

one

class of cash flows. ASU

2016

is effective for fiscal years beginning after

December 15, 2017,

with early adoption permitted. The standard requires application using a retrospective transition method. The adoption of this standard is

not

expected to have a material impact on Avalon’s financial position, results of operations or financial statement disclosures.

November 2016,

the FASB issued ASU

2016

18,

Statement of Cash Flows: Restricted Cash

(“ASU

2016

18”

), which requires entities to include restricted cash and restricted cash equivalent balances with cash and cash equivalent balances in the statement of cash flows. ASU

2016

will be effective

January 1, 2018

and will impact the presentation of our statement of cash flows for the restricted cash related to the remaining loan proceeds deposited into our project fund account that have

not

yet been utilized to fund the additional renovation and expansion of The Avalon Inn.

January 2017,

the FASB issued ASU

2017

01,

Business Combinations

(Topic

805

)

: Clarifying the Definition of a Business

(“ASU

2017

01”

). The purpose of ASU

2017

is to change the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business. ASU

2017

is effective for annual periods beginning after

December 15, 2017,

including interim periods within those annual periods. The Avalon Athletic Club

at Boardman

, acquired in

March 2018,

will be accounted for in accordance with ASU

2017

01.