NATURE OF BUSINESS AND ORGANIZATION	9 Months Ended
Oct. 31, 2017
NATURE OF BUSINESS AND ORGANIZATION
NATURE OF BUSINESS AND ORGANIZATION	Note 1. The financial statements included herein have been prepared without audit (except for the balance sheet at January 31, 2017) in accordance with the instructions to Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations. In the opinion of the Trustees, all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of (a) the results of operations for the three and nine months ended October 31, 2017 and 2016, (b) the financial position at October 31, 2017 and (c) the cash flows for the nine months ended October 31, 2017 and 2016, have been made. For further information, refer to the financial statements and footnotes included in Mesabi Trust’s Annual Report on Form 10-K for the year ended January 31, 2017. Recent Accounting Pronouncements Revenue from Contracts with Customers In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” which supersedes the guidance in “Revenue Recognition (Topic 605)” and requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period and is to be applied retrospectively, with early application not permitted. In August 2015, the FASB issued ASU 2015-14, “Revenue from Contracts with Customers: Deferral of the Effective Date,” which defers the adoption of ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period, however the Trust is not planning early adoption. Therefore, it is anticipated that the financial statements of Mesabi Trust will first reflect this new standard in the financial statements of the Trust for the fiscal quarter ending April 30, 2018. Mesabi Trust is currently evaluating the new standard as it relates to its existing royalty contracts with Northshore Mining Company (“Northshore”). The Trust believes it is likely that the new standard will have an impact on the revenue recognized on a quarterly basis, but it is unlikely that the amount of revenue recognized annually will be materially changed. The Trust is planning to implement the guidance using the full retrospective transition method and has established an appropriate timeline for the implementation of the new standard. The primary impact of the adoption on the financial statements relates to additional disclosures over revenue recognition in the notes to the financial statements. Application of this new revenue recognition standard will not alter the existing royalty agreement between the Trust and Northshore Mining, or the existing rights and obligations of the parties under that agreement. Therefore, this new standard is not expected to impact the amount of iron ore royalties due and payable to Mesabi Trust, or the amount of funds available for possible distribution by the Trust.

Note 1. The financial statements included herein have been prepared without audit (except for the balance sheet at January 31, 2017) in accordance with the instructions to Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations. In the opinion of the Trustees, all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of (a) the results of operations for the three and nine months ended October 31, 2017 and 2016, (b) the financial position at October 31, 2017 and (c) the cash flows for the nine months ended October 31, 2017 and 2016, have been made. For further information, refer to the financial statements and footnotes included in Mesabi Trust’s Annual Report on Form 10-K for the year ended January 31, 2017.

Recent Accounting Pronouncements

Revenue from Contracts with Customers

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” which supersedes the guidance in “Revenue Recognition (Topic 605)” and requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period and is to be applied retrospectively, with early application not permitted. In August 2015, the FASB issued ASU 2015-14, “Revenue from Contracts with Customers: Deferral of the Effective Date,” which defers the adoption of ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period, however the Trust is not planning early adoption. Therefore, it is anticipated that the financial statements of Mesabi Trust will first reflect this new standard in the financial statements of the Trust for the fiscal quarter ending April 30, 2018.

Mesabi Trust is currently evaluating the new standard as it relates to its existing royalty contracts with Northshore Mining Company (“Northshore”). The Trust believes it is likely that the new standard will have an impact on the revenue recognized on a quarterly basis, but it is unlikely that the amount of revenue recognized annually will be materially changed. The Trust is planning to implement the guidance using the full retrospective transition method and has established an appropriate timeline for the implementation of the new standard. The primary impact of the adoption on the financial statements relates to additional disclosures over revenue recognition in the notes to the financial statements. Application of this new revenue recognition standard will not alter the existing royalty agreement between the Trust and Northshore Mining, or the existing rights and obligations of the parties under that agreement. Therefore, this new standard is not expected to impact the amount of iron ore royalties due and payable to Mesabi Trust, or the amount of funds available for possible distribution by the Trust.