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Note 5 - Milestone Revenue Recognition
3 Months Ended
Mar. 30, 2014
Milestone Revenue Recognition [Abstract]  
Milestone Revenue Recognition [Text Block]

(5)           Milestone Revenue Recognition


The Company periodically enters into research and development contracts with customers related primarily to key encryption products. When the contracts provide for milestone or other interim payments, the Company will recognize revenue under the milestone method in accordance with ASC 605-28. The Company had one contract in process as of March 30, 2014 being accounted for under the milestone method. The milestone method requires the Company to deem all milestone payments within each contract as either substantive or non-substantive. That conclusion is determined based upon a thorough review of each contract and the deliverables to which the Company has committed in each contract. For substantive milestones, the Company concludes that upon achievement of each milestone, the amount of the corresponding defined payment is commensurate with the effort required to achieve such milestone or the value of the delivered item. The payment associated with each milestone relates solely to past performance and is deemed reasonable upon consideration of the deliverables and the payment terms within the contract. Milestones may include, for example, the successful completion of design review or technical review, the submission and acceptance of technical drawings, delivery of hardware, software or regulatory agency certifications. All milestones under the contract in process as of March 30, 2014 were deemed substantive. During the first quarter ended March 30, 2014, revenue recognized through the achievement of multiple milestones amounted to $1,275,000. There are no performance, cancellation, termination or refund provisions in the arrangement that contain material financial consequences to the Company.