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Note P - Government Grants
9 Months Ended
Sep. 30, 2020
Notes to Financial Statements  
Government Grants [Text Block]

NOTE PGOVERNMENT GRANTS

 

Government grants received by the Company’s Israeli subsidiary relating to categories of operating expenditures are credited to the consolidated statements of income during the period during which the expenditure to which they relate is charged. Royalty and non-royalty-bearing grants from the Israeli Innovation Authority ("IIA") for funding certain approved research and development projects are recognized at the time when the Company’s Israeli subsidiary is entitled to such grants, on the basis of the related costs incurred, and are included as a deduction from research and development expenses, net.

 

The Company recorded grants in the amount of $704 and $304 for the three month periods ended September 30, 2020 and 2019, respectively.

 

The Company recorded grants in the amount of $1,824 and $1,305 for the nine month periods ended September 30, 2020 and 2019, respectively.

 

The Company’s Israeli subsidiary is obligated to pay royalties amounting to 5% of the sales of certain products, the development of which benefited from grants received from the IIA in previous years. The obligation to pay these royalties is contingent on actual sales of such products. Grants received from the IIA may become repayable if certain criteria under the grants are not met. In addition, the grants may be required to be repaid with a multiple of up to six times the initial grant amount in case the technology that was developed using these grants are transferred, directly or indirectly, to a third party.