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Note 4 - Lease Receivable

12 Months Ended

Dec. 31, 2016

Note 4 – Lease Receivable

In 2016, the Company entered into a lease agreement with a customer whereby the Company will be the Lessor and the customer will be the lessee of a Planetarium System produced, delivered and installed by the Company. The lease term is 5 years and requires the customer to make rent payments to the Company over the lease term in accordance with the fixed schedule in the agreement. The equipment will be returned to the Company at the end of the lease term at which time the Company estimates that the system will have no residual value. The customer obtained control of the leased assets upon delivery and acceptance of the system on December 7, 2016. The lease is accounted for as a sales-type lease since the lease term is for substantially all of the economic life of the system, the present value of the lease payments amounts to substantially all of the fair value of the underlying assets, and the customer will retain the control with substantially all of the risks and awards of ownership of the system. The discounted present value of the payments to be made under the lease agreement, using an annual rate of 6%, amounts to $1,754. This amount represents the fair value of the equipment of $1,678 and the maintenance services E&S is to provide over the terms of the lease valued at $76. In 2016, the Company recorded the sale of the system of $1,678. Also, $76 of deferred revenue was recorded representing the value of the maintenance services.

The balance of lease receivable as of December 31, 2016 is recorded as follows:

	2016

Lease receivable	$252
Lease receivable long term	1,083
Total	$1,335

- Definition

Disclosure of accounting policy for finance, loan and lease receivables, including those held for investment and those held for sale. This disclosure may include (1) the basis at which such receivables are carried in the entity's statements of financial position (2) how the level of the allowance for loan and lease losses is determined (3) when impairments, charge-offs or recoveries are recognized for such receivables (4) the treatment of origination fees and costs, including the amortization method for net deferred fees or costs (5) the treatment of any premiums or discounts or unearned income (6) the entity's income recognition (revenues, expenses and gains and losses arising from committing to issue, issuing, granting, collecting, terminating, modifying and holding loans) policies for such receivables, including those that are impaired, past due or placed on nonaccrual status and (7) the treatment of foreclosures or repossessions.

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