Significant Accounting Policies (Policies)

9 Months Ended

May 31, 2014

Accounting Policies [Abstract]

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.  These estimates include allowance for doubtful accounts receivable, slow moving and obsolete inventory reserves, recoverability of the carrying value and estimated useful lives of long-lived assets, workers’ compensation liability and the valuation allowance against deferred tax assets.  Actual results could differ from those estimates.

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared by the Company in conformity with GAAP for interim financial information and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim reporting. In the opinion of management, all adjustments considered necessary in order to make the financial statements not misleading have been included. 

Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to SEC rules and regulations for presentation of interim financial information. Therefore, the condensed consolidated interim financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended August 31, 2013. The condensed consolidated balance sheet as of August 31, 2013 and related disclosures were derived from the audited consolidated financial statements as of August 31, 2013. Operating results for the three and nine month periods ended May 31, 2014 are not necessarily indicative of the results that may be expected for future quarterly periods or the entire fiscal year.

Reclassification, Policy [Policy Text Block]

Reclassification

Certain prior year amounts have been reclassified to conform to the current year’s presentation, primarily relating to the reclassification of assets and liabilities of assets held for sale.

Consolidation, Policy [Policy Text Block]

Principles of Consolidation

The unaudited condensed consolidated financial statements include the accounts of EACO, Bisco and Bisco Industries Limited. All significant intercompany transactions and balances have been eliminated in consolidation.

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

Restricted Cash

The State of Florida Division of Workers’ Compensation requires self-insured companies to pledge collateral in an amount sufficient to cover the projected outstanding liability. In compliance with this requirement, for EACO’s previous restaurant operations, the Company pledged two irrevocable letters of credit totaling $2,713,000 as of May 31, 2014 and August 31, 2013. These letters were secured by certificates of deposits totaling $548,000 at May 31, 2014 and August 31, 2013 and EACO’s two real estate properties in Sylmar, California (the “Sylmar Properties”). As a result of the sale of the Sylmar properties, the Company has secured this portion of the irrevocable letters of credit with the Company’s line of credit held with Community Bank.

Trade and Other Accounts Receivable, Policy [Policy Text Block]

Trade Accounts Receivable

Trade accounts receivable are carried at original invoice amount, less an estimate for an allowance for doubtful accounts. Management determines the allowance for doubtful accounts by identifying probable credit losses in the Company’s accounts receivable and reviewing historical data to estimate the collectability on items not yet specifically identified as problem accounts. Trade accounts receivable are written off when deemed uncollectible. Recoveries of trade accounts receivable previously written off are recorded when received. The Company does not charge interest on past due balances. The allowance for doubtful accounts was $88,000 and $183,000 at May 31, 2014 and August 31, 2013, respectively.

Inventory, Policy [Policy Text Block]

Inventories

Inventories consist of finished goods, primarily electronic fasteners and components, stated at the lower of cost or estimated market value. Cost is determined using the average cost method. Inventories are reported net of a reserve for slow moving or obsolete items of $1,000,000 and $924,000 at May 31, 2014 and August 31, 2013, respectively. The reserve is based upon management’s review of inventories on-hand over their expected future utilization and length of time held by the Company.

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

Long-Lived Assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  For purposes of the impairment review, assets are measured by comparing the carrying amount to future net cash flows.  If assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds their estimated fair values.

Liabilities of Discontinued Operations [Policy Text Block]

Liabilities of Discontinued Operations

The Company maintains a reserve for self-insured losses for workers’ compensation claims up from its previous restaurant operations. The liability for workers’ compensation represents an estimate of the present value of the ultimate cost of uninsured losses which are unpaid as of the balance sheet dates. This liability is presented as liabilities of discontinued operations in the accompanying condensed consolidated balance sheets. The estimate is continually reviewed and adjustments to the Company’s estimated liability, if any, are reflected in discontinued operations. On a periodic basis, the Company obtains an actuarial report which estimates its overall exposure based on historical claims and an evaluation of future claims. An actuarial evaluation was last obtained by the Company as of August 31, 2013. No changes to the estimated liability were recorded during the nine months ended May 31, 2014.

Income Tax, Policy [Policy Text Block]

Deferred Tax Assets

The Company’s policy for recording a valuation allowance against deferred tax assets is considered critical. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefit or when future deductibility is uncertain. The Company records net deferred tax assets to the extent management believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income (if any), tax planning strategies and recent financial performance. At May 31, 2014, due to expiring U.S. Federal capital loss carryforwards, the valuation allowance previously established against this deferred tax asset was reduced by $1,557,000. In addition, management has concluded that a valuation allowance of $176,000 should be recorded against deferred tax assets related to certain state net operating loss carryforwards. The utilization of these credits requires sufficient taxable income in the respective state jurisdictions.

Revenue Recognition, Policy [Policy Text Block]

Revenue Recognition

The Company generally recognizes revenue at the time of product shipment as the shipping terms are FOB shipping point. Revenue is considered to be realized or realizable and earned when there is persuasive evidence of a sales arrangement in the form of an executed contract or purchase order, the product has been shipped, the sales price is fixed or determinable, and collectability is reasonably assured.

Earnings Per Share, Policy [Policy Text Block]

Earnings Per Common Share 

Basic earnings per common share for the three and nine months ended May 31, 2014 and 2013 were computed based on the weighted average number of common shares outstanding during each respective period. Diluted earnings per common share for those periods have been computed based on the weighted average number of common shares outstanding, giving effect to all dilutive potential common shares that were outstanding during the respective periods.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

Foreign Currency Translation and Transactions

Transactions in currencies other than the functional currency (i.e., Canadian dollars for the Bisco’s Canadian subsidiary) are recorded using the exchange rates prevailing at the dates of the transactions. Exchange adjustments arising from the difference between the date a transaction was recognized and the date in which it was settled are recognized in the income statement within net income or loss.

Assets and liabilities recorded in functional currencies other than the U.S. dollar are translated into U.S. dollars at the period end rate of exchange. Revenue and expenses are translated at the weighted-average exchange rates for the three and nine months ended May 31, 2014 and 2013. The average exchange rate for the three months ended May 31, 2014 and 2013 was $0.91 and $0.98 Canadian dollars for one U.S. dollar, respectively. The average exchange rate for the nine months ended May 31, 2014 and 2013 was $0.93 and $1.00 Canadian dollars for one U.S. dollar, respectively. The resulting translation adjustments are charged or credited directly to accumulated other comprehensive income.

Concentration Risk, Credit Risk, Policy [Policy Text Block]

Concentrations

Net sales to customers outside the United States were approximately 7% for the nine months ended May 31, 2014 and 2013, and related accounts receivable were approximately 8% and 5% at May 31, 2014 and August 31, 2013 respectfully.

No single customer accounted for more than 10% of revenues for the three or nine months ended May 31, 2014 or 2013.